Reserves Remain Healthy

• The Bank of Jamaica (BOJ) says the country has adequate gross and net international reserves to finance its obligations, cushion against exogenous shocks, and address near to medium-term eventualities.
• The gross reserves total US$4.24Bn, representing 129% of the level deemed sufficient according to the International Monetary Fund’s (IMF) measure of reserve adequacy.
• Further, the Net International Reserve (NIR) was approximately US$3.66Bn at the end of July 2022 which indicates 23.67 weeks of goods and services imports. While the total NIR is 7.7% below the level at the beginning of October 2021, when the Bank adopted a more stringent policy stance in relation to inflation, Senior Deputy Governor, Dr. Wayne Robinson has indicated that the Bank has more than sufficient reserves.
• 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.
• 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 open and vulnerable to a myriad of shocks due to its dependence on other economies highlighted by the balance of payment deficit.

(Sources: The Bank of Jamaica & JIS News)