February 8, 2021
Jamaica’s Net International Reserves (NIR) totalled US$2,982.80 million as at January 2021, reflecting a decrease of US$147.99 million relative to the US$3,130.79 million reported at the end of December 2020 (see figure 1).
This change in the NIR resulted from a US$147.64 million decrease in Foreign Assets which total US$3,938.11 million compared to the US$4,085.75 million reported for December 2020. ‘Currency & Deposits’ contributed the most to the decrease in Foreign Assets. ‘Currency & Deposits’ as at January 2021 totalled US$3,371.95 million reflecting a decrease of US$144.50 million compared to US$3,516.45 million booked as at December 2020.
‘Securities’ amounted to US$341.54 million; US$3.22 million less than the US$344.76 million reported at December 2020. While ‘SDR & IMF Reserve Position’ amounted to US$224.62 million; US$0.08 million more than the US$224.54 million reported at December 2020. Liabilities to the IMF accounted for 100% of total Foreign Liabilities; this amounted to US$955.31 million which reflected a month on month increase of US$0.35 million in comparison to the US$954.95 million recorded for December 2020.
At its current value, the NIR is US$111.45 million less than its total of US$3,094.25 million reported at the end of January 2020. The current reserve is able to support approximately 50.23 weeks of goods imports and 36.14 weeks of goods and services imports.
Figure 1
Figure 2
The country came in above the benchmark of US$3.155 billion outlined by the International Monetary Fund for March 2020, closing the fiscal year at US$3.24 billion, US$0.09 million above targeted amount. The Net International Reserve (NIR) target outlined as per the new agreement for the 2020/21 fiscal year is US$3.485 billion (see figure 2 above). As at January 2021, the Country is US$0.51 million below the targeted amount.
According to The Bank of Jamaica (BOJ), its assessment proves that Jamaica’s international reserves remain buoyant. Outflows from the NIR are largely offset by net purchases via the public sector entities (PSE) facility. An increase in net claims on the PSE reflected increased holdings of GOJ securities, partly offset by higher Central Government deposits. Additionally, demand for currency, which affects outflows, has been influenced in 2020 by the public’s desire to hold its assets in more liquid forms. Based on the BOJ’s assessment, as outlined in its most recent Quarterly Monetary Policy Report, the financial system in Jamaica has remained resilient throughout the pandemic.
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.
