Foreign Exchange Inflows Ease as Jamaican Dollar Faces Seasonal Pressure

Foreign exchange inflows into Jamaica’s market have slowed with the close of the summer season, according to NCB Capital Markets’ latest weekly market guide. The firm anticipates a continued tapering of inflows in the short term, as local businesses increase demand for Jamaican dollars to prepare for the upcoming Christmas retail period.

Key Details

NCB Capital Markets reports that the Jamaican dollar depreciated by 0.17% against the U.S. dollar week-over-week. The selling rate for the “greenback” moved from J$161.34 to J$161.62. This movement reflects ongoing shifts in market dynamics following reduced tourism-related FX inflows typical after summer.

Liquidity in the Jamaican money market increased notably during the same period. Data show that aggregate current balances held by Deposit-Taking Institutions (DTIs) reached J$73.53 billion as of October 10, 2025 — a 12% rise compared to the previous week.

Demand for short-term money market instruments remains robust. The Bank of Jamaica’s (BOJ) weekly 30-day Certificate of Deposit (CD) auction attracted total bids of J$42.24 billion, surpassing the J$31.50 billion on offer and representing a bid-to-offer ratio of 1.34x. While lower than the previous week’s ratio of 1.93x, overall market participation remained strong.

The average yield on the 30-day CD auction edged up slightly to 5.92% from 5.89% a week earlier. The next auction date is scheduled for October 15. Additionally, the BOJ executed a 14-day repurchase operation with DTIs totaling J$1 billion. The auction saw J$1.5 billion in bids, equating to a 1.5x bid-offer ratio and yielding an average of 6.26% — marginally above the prior 6.23%.

In the Government of Jamaica’s (GOJ) Treasury Bill market, all tenors were oversubscribed, signaling strong investor interest. The Ministry of Finance and the Public Service’s Debt Management Branch reported the following results:

• 3-month T-bill: Offer size J$700 million, bids J$1.36 billion (1.94x coverage), yield 5.15%.

• 6-month T-bill: Offer size J$700 million, bids J$2.43 billion (2.43x coverage), yield 5.17%.

• 9-month T-bill: Offer size J$700 million, bids J$3.22 billion (4.03x coverage), yield 5.44%.

These yields declined slightly compared to the previous auction results of 5.20%, 5.24%, and 5.33%, respectively.

Background

The Jamaican foreign exchange market experiences cyclical fluctuations throughout the year, with inflows often peaking during the high tourism season between late spring and summer. As visitor arrivals decline in the fall months, inflows from tourism, remittances, and external trade tend to moderate.

This seasonal adjustment typically coincides with an increase in domestic currency demand, especially as retailers and importers prepare for the year-end holiday season. The balance between inflows and demand for foreign currency plays a crucial role in influencing the exchange rate.

Analysis

The current moderation in FX inflows reflects a normal seasonal adjustment rather than a structural weakness. The depreciation of the Jamaican dollar remains mild and consistent with historical post-summer trends. The resilience of the money market, evidenced by strong investor appetite for both BOJ and GOJ instruments, underscores confidence in the short-term fixed-income environment.

Rising liquidity among DTIs suggests an easing in short-term funding conditions, potentially supporting lending and broader financial activity heading into the last quarter of 2025. However, continued vigilance will be necessary to balance exchange rate stability with inflation control.

Our Opinion

The slowdown in foreign exchange inflows is an expected seasonal pattern that should stabilize as the tourism sector ramps up for the winter season. Strong domestic liquidity and sustained investor demand for short-term instruments are positive indicators for market confidence. While the Jamaican dollar may experience minor fluctuations, the country’s FX and monetary systems appear well-positioned to maintain stability through the remainder of 2025.