BOJ Governor Welcomes Approval of IMF Standby Agreement

Bank of Jamaica (BOJ) Governor, Brian Wynter, has welcomed approval of the country’s new three-year US$1.64-billion Standby Agreement by the International Monetary Fund’s (IMF) Executive Board.

The agreement, which was ratified at the Board’s meeting on Friday, November 11, immediately replaces the Extended Fund Facility (EFF) that has been in place since 2013 and will enable Jamaica to immediately access an initial US$411.9 million, if necessary.

Speaking at the Bank’s quarterly briefing at the BOJ auditorium in downtown Kingston on Monday (November 14), Mr. Wynter said the new agreement, which formalises the IMF’s support for Jamaica’s economic programme, is significant in a number of ways.

Notably, he pointed out, is the provision of “powerful” additional assurance to prospective investors that “a very substantial cache of resources is available to the country… in the event that it is needed”, without adding to the nation’s debt burden.

Mr. Wynter pointed out that consequent on the EFF’s implementation, Jamaica’s economic fundamentals continue to be positive.

Of significance, he said, is the decline in the deficit on current account of the balance of payments for the June 2016 quarter, which fell to US$13 million, compared to US$118 million for the corresponding period last year.

“For this fiscal year, the Bank of Jamaica projects that the current account deficit will be the equivalent to about three per cent of gross domestic product (GDP), which although higher than the 1.8 per cent of the previous fiscal years, is much lower than the 10 to 14 per cent that we were experiencing before the Extended Fund Facility Programme,” the Governor indicated.

Mr. Wynter said the BOJ also projects gross foreign direct investment inflows close to the US$950 million or 6.6 per cent recorded during the 2015/16 fiscal year.

This projection, he added, is reflective of the anticipated continued investment in tourism and infrastructure, in particular.