JIS News

Minister of Finance and the Public Service, the Hon. Audley Shaw, on Monday (August 31) confirmed that Jamaica received an allocation of 74% of its quota of Special Drawing Rights (SDRs) from the International Monetary Fund (IMF) last Friday.
The Minister said that with the allocation, the Net International Reserves (NIR) of the Bank of Jamaica have increased to over US$1.9 billion, with the gross reserves being equivalent to 15.6 weeks of goods and service imports. This enhances the ability of the Bank to underwrite stability in the financial markets and to meet any shortfall in Jamaica’s external financing requirements
The release issued by the Minister stated:
On 28 August, 2009, the Bank of Jamaica received an allocation of Special Drawing Rights (SDRs) from the International Monetary Fund (IMF), equivalent to US$303.41 million or approximately 74 per cent of Jamaica’s quota with the IMF.
This follows the decision by the IMF to bolster the reserves of member countries with a general allocation of SDR’s equivalent to US$250 billion. The allocation arose out of the need to bolster liquidity in the global economy, following the financial crisis and the attendant tightening of global capital markets.
Special Drawing Rights is an interest bearing international reserve asset, created by the IMF to supplement the official reserves of the central banks of member countries. It is not a currency used in commercial transactions, but can be exchanged for widely used international currencies at a value that is based on a basket of the four key international currencies, that is US dollar, Euro, Yen and Pound Sterling. (The current rate of exchange is SDR 1.00 = US$1.57). As such, the central banks of member countries now have an opportunity to acquire additional hard currency to support their external obligations (i.e. Balance of Payments).
Member countries will also benefit from a special allocation of SDR’s on September 9, 2009 totalling US$33 billion. This follows an amendment to the IMF’s Articles of Agreement (Fourth Amendment), which would enable members to participate in the SDR system on a more equitable basis. Under this arrangement Jamaica will receive SDR 18 million, or approximately US$27.4 million, bringing the total allocation to US$330 million.
Following the general allocation on August 28, the Net International Reserves (NIR) of the Bank of Jamaica increased to US$1929.97 million, with the gross reserves being equivalent to 15.6 weeks of goods and service imports. This allocation therefore enhances the ability of the Bank to underwrite stability in the financial markets and to meet any shortfall in the country’s external financing requirements.”

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