The Bank of Jamaica (BOJ) is reporting that it has reduced the cash reserve requirements for deposit-taking institutions (DTIs) by two percentage points.

The move which became effective on Friday will see the cash reserves of both domestic and foreign currency being reduced. Reserve requirements are the amount of monies that banks, building societies, etc are required to hold at the BOJ against prescribed liabilities, noting also that no interest is paid on cash reserves.

In a statement the BOJ said that the foreign currency cash reserve requirement has been reduced to 13 per cent while the domestic currency cash reserve requirement has been reduced to five per cent.

“Both adjustments are aimed at boosting liquidity levels in the financial system in the context of the strain caused by the impact of COVID-19,” the release said.

The central bank noted that the reduction in the foreign currency cash reserve requirement will return approximately US$65.0 million to DTIs expanding the volumes of foreign currency available to them. On the other hand, the reduction in the domestic cash reserve will release approximately $14 billion to the entities.

http://www.jamaicaobserver.com/sunday-finance/boj-reduces-cash-reserve-requirement-for-dtis_194264