NIR at US$3.2 Billion

The country’s Net International Reserves (NIR) now stand at US$3.2 billion, putting the country in a better position to withstand external shocks.

This was disclosed by Minister of Finance and the Public Service, Hon. Audley Shaw, during the 13th Jamaica Stock Exchange (JSE) Investments and Capital Markets Conference at The Jamaica Pegasus hotel in New Kingston on January 24.

He said approximately 80 per cent of that stock is in non-borrowed reserves, noting that Gross Foreign Reserves now stand at US$3.8 billion.

The NIR represent contingency funds, which can enable the country to survive severe external shocks, cope with shifts in investor confidence and natural disasters.

While the reserves are not credited to the country’s revenues, they provide confidence to the markets that external obligations can be met.

Meanwhile, Minister Shaw noted that the foreign exchange market continues to improve, with the rate of exchange appreciating by almost three per cent for the 12-month period ending January19, 2018, when compared with a depreciation of 6.6 per cent for the corresponding period of 2017.

“I want to make the point to those who want to contemplate speculating with the exchange rate again that not only are our reserves at record levels but under the standby arrangement with the International Monetary Fund now, we have access to another US$1.6 billion if we need it. Because we have passed the last two tests, we already have access to almost US$800 million of that, half of it; we have access to it, if we need it,” he pointed out.

Minister Shaw encouraged persons with foreign exchange to “find something productive to deploy your foreign exchange in, not in speculation”.

He noted that speculations have a negative impact on the country. “Speculations drive down the exchange rate, increase the cost of everything from energy across the board,” he pointed out.

Turning to other matters, the Finance Minister said the nominal debt stock has been on a downward trajectory during the fiscal year, decreasing by approximately three per cent between April and December 2017.

He noted that the debt-to-gross domestic product (GDP) ratio is projected to fall to approximately 105 per cent at the end of fiscal year 2017/18.

Mr. Shaw said it is projected that the debt-to-GDP ratio will be 60 per cent or less at the end of fiscal year 2025/26, and this is in line with the legislated ceiling established under the Financial Administration and Audit (Amendment) Act.

The two-day JSE Conference is being held from January 24 to 25 under the theme ‘Driving Growth: Regional Investments for the Climate of Change’.