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Dip in NIR worrying
6:13 am, Thu November 8, 2012
There is deepening concern about the country's Net International Reserves, NIR, following the release of information from the Bank of Jamaica,, BoJ which shows there has been another big decline.
According to the monthly update from the Central Bank, the NIR fell by US$125 in October.
It closed at US$1.13 billion or 13 weeks of imports.
The NIR was valued at 14 weeks in the previous month.
The international benchmark is for a country's NIR to be capable of purchasing more than 12 weeks of goods and service imports.
The continued decline in the NIR is due to the BoJ's intervention in the foreign exchange market to prevent the Jamaican dollar from sliding faster than it has so far.
Opposition Spokesman on Finance Audley Shaw, has chided the government for the falling NIR describing it as a sad state of affairs.
There are fears that if a new deal with the International Monetary Fund, IMF, is not reached before the end of the year, then the NIR could head close to a critical level.
Group strategist at Scotiabank, Dr. Adrian Stokes, says the situation is cause for concernas... “We do not know when an IMF agreement will be in.”
The Simpson-Miller administration is trying to complete negotiations with the IMF by year end to secure loans that could prop up the NIR.
The Bank of Jamaica recently increased its open market operations to mop up liquidity in the financial market and ease the pressure off the dollar which is trading above the J$91 mark against the American currency.
6:13 am, Thu November 8, 2012
There is deepening concern about the country's Net International Reserves, NIR, following the release of information from the Bank of Jamaica,, BoJ which shows there has been another big decline.
According to the monthly update from the Central Bank, the NIR fell by US$125 in October.
It closed at US$1.13 billion or 13 weeks of imports.
The NIR was valued at 14 weeks in the previous month.
The international benchmark is for a country's NIR to be capable of purchasing more than 12 weeks of goods and service imports.
The continued decline in the NIR is due to the BoJ's intervention in the foreign exchange market to prevent the Jamaican dollar from sliding faster than it has so far.
Opposition Spokesman on Finance Audley Shaw, has chided the government for the falling NIR describing it as a sad state of affairs.
There are fears that if a new deal with the International Monetary Fund, IMF, is not reached before the end of the year, then the NIR could head close to a critical level.
Group strategist at Scotiabank, Dr. Adrian Stokes, says the situation is cause for concernas... “We do not know when an IMF agreement will be in.”
The Simpson-Miller administration is trying to complete negotiations with the IMF by year end to secure loans that could prop up the NIR.
The Bank of Jamaica recently increased its open market operations to mop up liquidity in the financial market and ease the pressure off the dollar which is trading above the J$91 mark against the American currency.
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