Bank of Jamaica (BoJ) Governor, Brian Wynter, is reporting that the country’s gross international reserves currently stand at just under US$2 billion.
Speaking at the institution’s quarterly briefing, at the BoJ auditorium, downtown Kingston, on November 14, Mr. Wynter informed that up to November 13, total reserves stood at US$1.98 billion, representing approximately 14.1 weeks of projected goods and service imports, while assuring that this level “remains above the international benchmark of 12 weeks.”
“By any measure, this is more than ample…and I can tell you, sitting where I am, that I don’t have a problem with the quantity of resources to use for appropriate interventions and actions,” he further assured.
Noting that the quantity of net international reserves (NIR) had declined to US$1.3 billion at the end of the July to September quarter, the Governor attributed this to the BoJ’s net sales of US$214.8 million to the domestic market, in an effort to temper the 1.4 per cent depreciation in the weighted average selling rate of the Jamaica dollar against its US counterpart. This, he noted, followed the 1.6 per cent decline recorded in the April to June quarter.
“The uncertainties in the domestic economy continued to be reflected in demand pressures in the foreign exchange market and increased investor preference for short-term domestic instruments,” he pointed out.
In this regard, the Governor said the Bank’s “intervention sales” were used to satisfy pent-up demand for foreign currency to finance international trade.
Mr. Wynter noted that the BoJ’s monetary policy has remained unchanged since the July to September 2011 quarter, “mainly because of the continued uncertainties in the external and domestic economic environment.”
“As you would be aware, the Bank held its policy rate, that is the rate on its 30-day certificates of deposit, at 6.25 per cent. During the quarter, the negative expectations stemmed from anxieties about the period of negotiations with the International Monetary Fund (IMF) for a new agreement covering the medium term. The decline in the net international reserves has (also) fueled these anxieties,” he said.
Additionally, the Governor said concerns continue about global growth and debt, and fiscal sustainability issues in Europe, pointing out that these have “permeated” international financial markets.
“The Bank remains optimistic that an agreement on the medium term programme will be arrived at with the IMF in the near term, and that it will have a positive impact on market confidence…and foreign exchange inflows,” Mr. Wynter said.