BOJ allocates J$4.5 billion in 14-day repo auction

Bank of Jamaica allocated J$4.5 billion in 14-day repurchase funding on October 12, meeting the full amount offered to deposit-taking institutions after eligible bids reached J$5 billion.

The central bank’s results record five eligible bids and a weighted-average interest rate of 6.70%. The operation supplies Jamaican-dollar liquidity, or access to readily usable funds, through a temporary transaction secured by securities. It is distinct from an announcement changing BOJ’s policy rate.

A repurchase agreement exchanges securities for cash with an agreement to reverse the exchange later. In economic terms it provides secured short-term financing: the institution receives money for the agreed period while the securities protect the funding provider. Here, BOJ’s announcement sets out the eligible participants, bidding rules and collateral requirements.

The highest submitted rate was 6.82% on J$1.3 billion, and that was also the highest successful rate. The lowest eligible bid was J$1 billion at 6.46%. The result identifies 6.49%, on J$1 billion, as the lowest rate that obtained full allocation.

Bids at 6.46% received a 50.00% partial allocation. BOJ’s ordering rule gives priority to higher interest-rate bids and works downward until the auction amount is exhausted or eligible requests have all been filled. Partial allocation at the lowest successful rate means those bids obtained only part of the funding they sought.

The reported weighted average describes the funded amounts together, rather than a common price charged to every borrower. Under the auction terms, each successful bid is settled at the interest rate that the institution itself offered.

The announced settlement date is October 13 and the maturity date is October 27. Settlement is the point at which the transaction is carried out; maturity marks the end of the funding period. Those dates establish the stated 14-day duration.

Participation required a minimum bid of J$100 million. Each deposit-taking institution could enter up to three competitive bids, with interest rates stated to no more than two decimal places. Applications were due by the morning deadline on October 12.

Institutions were required to identify the securities they would provide as collateral when applying. Following notification of the allocation, the final collateral for successful bids was to be confirmed with BOJ’s Trading Room. The bank retains discretion to reject bids in whole or part.

Funding will not settle until the eligible collateral is in BOJ’s custody. That condition matters for timing: an institution delivering collateral late could receive the cash for fewer days, because the October 27 maturity date remains unchanged. The announcement says the transactions are effected through the central bank’s securities and payment settlement systems.

The result supplies the next confirmed operational step: another 14-day repurchase auction is scheduled for October 16. It does not identify the institutions behind individual bids.