However NIR up 9% year-over-year

Durrant Pate/Contributor

Jamaica’s Net International Reserves (NIR) suffered a US$144.20-million dip in July, but the Bank of Jamaica (BOJ) is trumpeting that the reserves remain healthy.

As at July 31, 2022, the NIR stood at US$3.66 billion compared to the US$3.80 billion reported at the end of June 2022. Foreign assets totalled US$4.24 billion, which is US$146.54 million less than the US$4.38 billion reported in June 2022.

‘Currency & Deposits’ held by the BOJ as at July 31, 2022 amounted to US$3.72 billion, reflecting a decrease of US$161.12 million compared to the US$3.86 billion reported in June 2022. ‘Securities’ were valued at US$327.25 million; up US$11.40 million from the US$315.85 million reported at the end of June 2022.

At its current value year-over-year, Jamaica’s international reserve is US$301 million or nine per cent more than the $3.35 b billion held by the BOJ on July 31, 2021.

NIR in weeks of imports

The current NIR supports approximately 34.90 weeks of goods imports and 23.67 weeks of goods and services imports. Jamaica’s ‘Special Drawing Rights & International Monetary Fund (IMF) Reserve Position’ rose marginally to US$191.01 million from the US$187.84 million reported last month.

Liabilities to the IMF were reduced by US$2.35 million to US$582.82 million against the US$585.17 million reported at the end of June 2022. Even with the decline in the NIR, the BOJ is declaring that the relatively healthy NIR level sends a positive signal about the country’s ability to respond to economic shocks.

However, in a press release recently, the BOJ indicated that “although the COVID-19 cases have declined and the labour market has shown signs of improvement, the uncertainty surrounding the virus is still high. Global markets have also been hampered by the geopolitical tension between Russia and Ukraine which has exacerbated the supply bottleneck and pushed many prices higher”.

With these developments, the BOJ said it anticipates that foreign exchange flows could be lighter in the short term, which could put a strain on Jamaica’s NIR.