THE MINISTRY of Finance has announced the issue of a fixed 12 per cent United States dollar indexed bond tomorrow, at its most attractive interest rate offered to the market in two years.
The bond is advertised as an unlimited offer for budgetary support, but its primary purpose is to draw investor funds away from the US currency as Government implements the second intervention tool announced Sunday night by Prime Minister Patterson to stabilise the dollar.
The dollar has regained $5.53 in value since Friday, ending yesterday's trading at $61.69, following two days of the Bank of Jamaica selling funds into the market.
Since last year, the index bonds issued have come to the market at fixed rates of 10.5 per cent to as high as 11.625 per cent.
The premium coupon rate on offer was last at 12 per cent in June 2001 on a 60-month instrument redeemable in 2004.
The new issue will have a tenor of 21 months, redeemable in 2005. Interest is payable semi-annually, and will be taxed.
Announcing the details of the new bond yesterday, Finance Minister Dr. Omar Davies said the offer came after intense consultations with the private sector and the market, in an indication that government was anticipating strong support for the investment instrument.
