Jamaica’s critical “savings” account, our Net International Reserves (“NIR”), has fallen below the psychologically important US$1 Billion mark for the first time since January 2001. The NIR lost 7% of its value in February, and now stands at US$939.53 Million. At current exchange rates, this amount represents enough reserves to purchase less than 16 weeks of imported goods (oil, food, etc.).
The country’s reserves have now lost more than 50% of its value since January 2012. They had fallen eleven consecutive months before a small increase in December, but have now started a new consecutive streak of two months in a row.
Although the nation’s NIR has, in its history, become negative for a few months, those were the very early days of Jamaican dollar liberalization. Even so, the NIR has never sustained such a sudden period of sustained monthly decline in the data the Bank of Jamaica has collected since 1992.
There was a similar decline from December 2001 to December 2003, but it was more gradual and there were never more than four consecutive months of decline.
In terms of the number of weeks of imported goods, we are very low now at just less than 16 weeks but we actually reached just over 12 weeks in March of 2009. That was “achieved” with a much higher NIR of US$1.6 Billion.