Bank of Jamaica (BoJ) Governor, Brian Wynter, says Jamaica’s reserves remain comfortably above the international benchmark of 12 weeks of imports of goods and services.
This, he said, is despite the Bank’s intervention in the local foreign exchange market to cover higher net demand for current account transactions, which net private capital inflows were insufficient to meet.
He was speaking on August 23 at the BoJ’s quarterly briefing at the institution’s offices, downtown Kingston.
The Bank sold some US$134.9 million to augment foreign exchange supplies in the market, which contributed to a decline of US$236.7 million in net international reserves (NIR), to end the June quarter at US$1.54 billion.
While assuring that there is no shortage of foreign exchange, Mr. Wynter pointed out that during the April to June quarter, the market experienced “periods of increased demand pressure” for currency, which contributed to the value of the Jamaican Dollar depreciating by 1.6 per cent against its US counterpart, relative to 0.8 per cent in the January to March quarter.
Mr. Wynter said the BoJ is anticipating that investor confidence will begin to improve, once stakeholders are able to assess the implications of the full range of measures impacting the foreign exchange market, which commenced following the presentation of the 2012/13 Budget.
“Improved investor confidence and official inflows, unlocked by an agreement between the Government and the International Monetary Fund (IMF) later in the year, should contribute to a recovery in the NIR to the level (of US$1.7 billion where) it was, at the start of the fiscal year,” Mr. Wynter stated.