Economy Update: July 2013 Net International Reserves


The break in the ‘downward streak’ of the Net International Reserves was short lived, as following 2 consecutive months of increases, the Net International Reserves at the end of July 2013 was US$929.72M. This represented a noteworthy dip of 7% in the balance of the national $US savings account.

Source: Bank of Jamaica

In terms of year over year comparisons, July 2013 NIR represents a decline of US$554.10M from July 2012’s US$1,483.82M and a whopping 57% reduction from the high of US$2,156.37M in July 2011.

Below is the revised NIR target that was issued by the Economic Programme Oversight Committee (EPOC) on May 22, 2013 following their first meeting. EPOC is the team that consists of private, public and civil society members, who are responsible for monitoring the compliance and progress of the IMF programme and advise the public where appropriate of any concerns.

diG Analysis NIR Target

As of August 14, according to diGJamaica calculations, Jamaica is currently BELOW the NIR target criteria to pass the September IMF test. This is because of the following:

1. The current balance of the NIR is US$929.72M

2. Jamaica paid out approximately US$81.3M to the IMF as repayments and penalties/fees on the 2010 Stand By Agreement on August 1 and August 8

3. That leaves Jamaica with a NIR balance of US$848.42M

4. As such, all things being equal, we are currently US$34.9M below the IMF’s September NIR target

The Bank of Jamaica currently has a strong positive Net Domestic Assets position of over J$4Bln.

They can utilize Open Market Operations to purchase US$ in order to shore up the NIR stock before the September deadline.

The NIR is a key indicator to watch closely as it has immense influence on Jamaica’s ability to complete the IMF agreement successfully. Checkout out our previous blog post as we zoomed in on the upcoming NIR targets specifically the September target.