JIS News

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  • Bank of Jamaica (BoJ) Governor, Brian Wynter, says the country’s Net International Reserves (NIRs) continue to grow, reaching just over US$2 billion at the end of the April to June quarter.
  • The amount, he said, can adequately cover the provision of approximately 19.8 weeks of imported goods and services.
  • Mr. Wynter said the US$2 billion raised by the Government through two bonds issued on the international market at long maturity and record low rates, “signals very strong investor confidence in Jamaica.”

Bank of Jamaica (BoJ) Governor, Brian Wynter, says the country’s Net International Reserves (NIRs) continue to grow, reaching just over US$2 billion at the end of the April to June quarter.

Speaking at the Bank’s quarterly media briefing, at the BoJ auditorium, downtown Kingston, on Wednesday (August 27), Mr. Wynter credited the strong NIR to improvements in net private capital inflows and sharper than anticipated declines in the current account deficit of Jamaica’s balance of payments.

The amount, he said, can adequately cover the provision of approximately 19.8 weeks of imported goods and services.

It far exceeds the target of US$1.42 billion for the quarter, under the Government’s four-year Extended Fund Facility (EFF) with the International Monetary Fund (IMF).

Mr. Wynter said that since the EFF’s implementation in May 2013, the BoJ has “comfortably” met the NIR target for each of the nine quarterly reviews conducted.

Meanwhile, the BoJ Governor said Jamaica’s current account for the January to March 2015 quarter, reflected a “modest” surplus of US$39.9 million.

In noting that this is the first quarterly surplus recorded in 11 years, Mr. Wynter credited the strong performance to the growth in tourism, which recorded an average

4.5 per cent increase in stopover visitor arrivals, over the past four years.

The Governor said the current account deficit is estimated to have narrowed during the April to June quarter, compared to the corresponding period last year.

“This is on the back of moderate growth in arrivals and remittances, and an improvement in merchandise trade,” he noted.

 

Mr. Wynter said it is anticipated that the current account, aided by lower oil prices, will contract to approximately three per cent of Gross Domestic Product (GDP) for the 2015/16 fiscal year, “and will be fully covered by the estimated Foreign Direct Investment (FDI) flows of four to five per cent of GDP.”

He noted that the economic transformation underpinning these developments results from the administration’s implementation of the structural reform programme, and fiscal discipline being exercised by them.

Meanwhile, Mr. Wynter said the US$2 billion raised by the Government through two bonds issued on the international market at long maturity and record low rates, “signals very strong investor confidence in Jamaica.”

“The Government is now fully financed for this fiscal year and, having completed the US$1.5 billion PetroCaribe debt buyback, the fiscal position and debt ratios are better than before,” he said.

Mr. Wynter also pointed to the notably “large injection” of liquidity into the financial system that will occur when the government repays the first of the maturing National Debt Exchange (NDX) bonds, in February 2016, totalling $62 billion.

This, he advised, represents an “unprecedented” occurrence that should “exert a powerful force, upwards, on the relative prices of domestic assets and downwards on the cost of money in Jamaica.”

While noting that this could present a “challenge” to margins in the financial sector and to returns for interests relying on investments in government paper, “it will…be positive for business confidence, job creation, and faster economic growth.”