Jamaica’s Net International Reserves Down 4.7% In August

• According to the Bank of Jamaica (BOJ), Jamaica’s Net International Reserves (NIR) stood at US$5,004.89Mn at the end of August 2024, reflecting a 1.2% (US$62.90Mn) reduction relative to July 2024 (US$5,067.79Mn). This marginal fall-off in the NIR can be attributed to a 1.2% (or US$61.84Mn) decline in total foreign assets along with a slight increase of US$1.06Mn in Foreign Liabilities.
• The dip in foreign assets reflects a fall in Currency and Deposits to US$3,412.48Mn from US$3,474.46Mn, and Special Drawings Rights (-46.6% or $18.58Mn). However, this was moderated by increases in Securities (+1.1%) and the IMF Reserve Position balance (+1.4%).
• The lower NIR came against the background of six interventions by the BOJ in the foreign exchange market during the month totaling US$180Mn.
• Still, the country’s NIR remains relatively high. The NIR for August translated to 25.3 weeks of goods & services imports (25.8 weeks at the end of July 2024). Compared to August 2023, the NIR increased by 14% (or $612.78Mn), up from $4,392.11Mn (24.0 weeks of imports). That said, at the current level, Jamaica’s NIR is more than double the international benchmark of 12-weeks of imports. 
• Maintaining an adequate level of reserves is one of the key pillars of underwriting and ensuring macroeconomic stability. This is important given that the country is small and vulnerable to a myriad of shocks due to its dependence on other economies, highlighted by the balance of payment deficit.
• The NIR reflects the difference between gross reserves and the country’s IMF loan debts. Gross reserves measure the total value of foreign exchange and monetary gold reserves, special drawing rights, IMF reserve positions, and other assets denominated in dollars.

(Sources: BOJ and NCBCM Research)