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In order to help stabilize local financial markets, the Bank of Jamaica (BoJ) is to implement further measures to mop up excess liquidity.
The Bank has announced it will offer a Special Certificate of Deposit to Primary Dealers and Commercial Banks, to mature on December 3.
Interest payable on this instrument will be over 20% per annum.
According to a BoJ release, this instrument is being offered Tuesday and Wednesday.
BoJ's regular menu of CDs ranging from 30 days to 365 days will remain on offer.
Increasing cash reserves
Meanwhile, effective December 3, on the expiration of a 15 day notice period, the Central Bank will increase the cash reserve requirement of commercial banks, merchant banks and building societies, to 11% of Jamaica Dollar liabilities, up from the current requirement of 9%.
The liquid asset requirement would therefore rise to 25% from the current 23%.
The BoJ says these monetary policy actions are temporary measures to support the achievement of the inflation objective and the maintenance of macro-economic stability.
Since the start of October, the Central Bank has been trying several interventions to slow the slide of the dollar and support the foreign exchange needs of local financial institutions reeling from the global financial crisis.
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