Economy Update: NIR Ends 2013 On High Note

Source: Bank of Jamaica
Source: Bank of Jamaica

 editors note.

At the end of December 2013 Jamaica’s Net International Reserves (NIR) amounted to US$1,047.83 billion. The NIR’s increase of US$212 million or 25% from US$835.69 million in November 2013, signifies a one-year high for the country’s US$ savings account. This is the highest reserves in the BOJ’s coffers since December 2012.

At current exchange rates, the reserves are sufficient to purchase less than 17 weeks of imported goods only and almost 13 weeks of imported goods and services, to be exact 16.73 and 12.60 weeks respectively.

The 25% month over month increase of the NIR for December 2013, was mainly due to a 14% or US$227 million increase in Foreign Assets. Majority of the inflows came from the World Bank approving the US$130 million development policy loan on December 13, 2013 and the Executive Board of the IMF approving Jamaica’s performance from the second review on December 18, 2013 which unlocked the third tranche of the 4-year agreement, an estimated US$30.8 million.

As at the end of December 2013 Net Domestic Assets stood at J$4.990 billion, representing a 63% decline from the J$13 billion at the end of November 2013. diGJamaica assumes the funds were used to purchase US$ to ensure the IMF’s  quantitative monetary target for the NIR end of Dec-2013 balance of US$836.5 million was met.

The Net International Reserves is a key indicator to monitor closely as it has immense influence on Jamaica’s ability to complete the IMF four-year Extended Fund Facility (EFF) arrangement successfully.

diG Deeper