Jamaica’s gross international reserves at US$4.7 billion

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Bank of Jamaica (BOJ) Governor, Richard Byles, [Photo: Rudranath Fraser]

By Douglas McIntosh

KINGSTON, Jamaica, (JIS) – The Bank of Jamaica (BOJ) is reporting that the country’s gross international reserves, as of November 17, totalled approximately US$4.7 billion. Governor, Richard Byles, said the figure represents the equivalent of 143.8 percent of the level considered adequate.

Deputy Governor with responsibility for banking, currency operations, and financial markets, Natalie Haynes, indicated that net international reserves (NIR), at the end of October, totalled US$3.9 billion, adding that “we expect stability for this month [November].”

Both were speaking during the BOJ Monetary Policy Committee (MPC) digital quarterly media briefing on Friday, November 19.

Byles said the Central Bank estimates that gross reserves will remain healthy. This, he noted, will be supported by a current account deficit of the balance of payments, ranging between one and three pe cent of gross domestic product (GDP), which he pointed out is a “sustainable level by traditional measures.”

“This reflects [previously] mentioned expectations for a recovery in tourist arrivals and spending [from the impact of the coronavirus (COVID-19) pandemic],” the Governor said.

Governor Byles also advised that the BOJ’s $8 billion net open position (NOP) cap, which was temporarily removed in January 2020, will be restored effective December 6, 2021.

Net open position, which is used to analyse foreign exchange risk, measures the difference between total assets and total liabilities in foreign currency.

Governor Byles told journalists, however, that the cap will be adjusted from the $8 billion limit to an asymmetric one, corresponding to a $4.5 billion ceiling for long NOP positions and $7 billion for shorter ones.

“The bank commits to continue reviewing these limits annually… and amending them if it is deemed necessary,” he said.

Meanwhile, Governor Byles reported that up to November 17, daily purchases by authorised dealers and Cambios averaged approximately US$36 million, which was higher than the US$31 million recorded for the corresponding period last year.

“At the same time, daily sales to end-users over the same period averaged close to US$35 million, above the US$27 million recorded a year earlier. Businesses and individuals in Jamaica, who require foreign exchange have been able to access it,” he noted, as BOJ continues to intervene in the foreign exchange market when temporary shortfalls are identified.

He advised that total BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT) flash sale operations and direct sales to the energy sector for the calendar year, to October 31, totalled US$675.4 million. The foreign exchange rate, as of November 17, was J$159.79 to US$1.

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