Jamaica’s net international reserves continue to scale new heights closing at the end of August 2023 jumped US$299 million to a record month end balance of US$4.43 billion, up from US$4.13 billion at the end of July.
The main factor driving the reserve is a reduction of amounts due to the International Monetary Fund (IMF) of $362 million moving the figure from US$508 million in short term debt down to US$146 million at the end of August.
At the end of December last year, the reserves stood at US$3.978 billion and have climbed US$456 million for the year to date.
Jamaica’ NIR jumps to record high
September 8, 2023 by
Jamaica’s reserves spike US$100m
June 8, 2021 by
Jamaica’s Net International Reserves climbed US$100 million higher in May to reach US$3.42 billion from US$3.32 at the end of April after a $300 million surge in March with a rise of US$303 to US$3.32 billion from US$3.016 billion at the end of February, this year.
The country’s gross reserves are now at US$4.35 billion and include US$930 million due to the International Monetary Fund. The increase in May comes at a time when inflows from tourism are at the highest levels since March 2020 as the sector makes rapid strides in recovery, with May having the highest number of overseas visitors since the country reopened its borders to tourist in June last year. Reports from the tourism industry suggest that visitor arrival numbers for June and July will be appreciably better than for May and should add to foreign currency inflows into the country and most likely the NIR as well.
The country is also benefitting from a continued increase in remittances inflows that became evident since May 2020.
The reserves are at the highest sustained levels in the country’s history. The net reserves represent an estimated 30.57 weeks of Goods & Services imports for Jamaica.
Jamaica’s NIR continues to rise
December 14, 2020 by
Net International Reserves (NIR) US$69 to close out November at US$2,963 up from US$2,893 in October. Jamaica’s NIR had a big jump of US$146 million in October from US$2.75 billion at the end of September.
Gross reserves rose by $73 million to $3.93 billion that includes US$970 million due to the International Monetary Fund. The October increase was the first major rise in net reserves for 2020. In March, the NIR rose to US$3.24 billion from US$3.13 billion, slipped to US$2.9 billion in May and ended July at a low of US$2.76 billion. The NIR now represents 38 weeks of goods and service imports, the Central Bank states.
FCIB 2nd Caribbean bank to abort US listing
April 20, 2018 by
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FirstCaribbean aborts IPO for NYSE listing.
Firstcaribbean International Bank (FCI) announced that they have withdrawn their planned initial public offering ahead of its plan to list on the New York Stock Exchange.
The Trinidad and Tobago Stock Exchange advised today, that they received notice from FCI advising of the withdrawal of the US registered public offering and listing of its shares on the NYSE in view of market conditions at this juncture. FCI had filed a registration statement in December 2017 relating to this public offering and proposed listing on the NYSE under the symbol “FCI”.
The company is the second Caribbean based banking group to have moved forward with plans to list on that stock exchange. The first was NCB Group in 2013, incurring a $680 million hit from the costs relating to aborted Initial Public Offering (IPO) in the 2013 fiscal year to September, according to the company’s audited financial statements.
The banking group was attempting to raise fresh capital in the international market, during the turbulent period ahead of the country reaching an agreement with the International Monetary Fund (IMF). The amount involved was written off against income thus helping to depress profits for the year.
NCB lost $700M in its aborted NYSE IPO plans in 2013.
Since then NCB has gone on to report record profits in 2017 with a 28 percent increase in the first quarter to December last year. At the same time FCIB that struggled for several years as it was battered by Caribbean countries in deep recession only saw a rebound in fortunes in recent years.
In 2013, the FCIB group adjusted profit was just US$35 million rising to $83 million in 2014 and onto $123 million the following year then $143 million in 2016 and $151 million last year, but revenues have just barely grown as loans have stagnated with US$6.36 billion in 2017 from US$6.3 billion in 2013.
Shaw must cut taxes in 2018
October 9, 2017 by
Image courtesy of cooldesign/FreeDigitalPhotos.net
All available data since 2016 show that the Government of Jamaica never needed to raise taxes to cover the lost revenues from the hiking of the threshold to $1.5 million, as revenues continue to run well ahead of forecast in the last fiscal year and for the current one.
IC Insider.com gathers that while the government never wanted to increase taxes to cover the cost of the increased threshold, as data suggested that there that the lost revenues would be covered by increased revenues, the International Monetary Fund insisted that they had to increase taxes to cover the lost revenues.
With revenues running well ahead of forecast for two years running its time government start planning to cut taxes in next year’s budget forecast.
Last fiscal year revenues were $8.6 billion better than projected, just about $2 billion short of the cost of the threshold but expenditure was $5 billion lower than planned for a net improvement of nearly $14 billion, much greater than the revenues foregone.
Collector of Taxes office, Constant Spring, Kingston.
After a mere 5 months of the fiscal year to August, the Ministry of Finance has amassed a tidy $14.6 billion more than forecast for the government coffers. If the trend continues by the end of the fiscal year we should be looking at $30 billion more than budgeted and would be more than the taxes foregone by the increase in the tax threshold.
In two years, government has amassed excess tax revenues of $45 billion and assuming there were no major adjustment in the tax threshold, to $70 billion.
The increased revenues over the past three years are well ahead of the increase from new taxes levied and after taking in account a major reduction in PAYE contribution in 2016-17. Not only are the inflows running well ahead of the prior year for the last two and a half years, increased revenues are well above forecast. Two factors are contributing to this buoyancy, improved economic activities and increased taxes, helped by strong increases in corporate profits that is pushing revenues higher.
GOJ revenues inflows have been extremely buoyant since the drop in budgeted inflows for the fiscal year to March 2015. While 2015 fiscal year came up short of budget by $16 billion with revenues at $412 billion, 2016 came in with $50 billion more than the out turn for 2015 at $456 billion and 2017 with total revenues of $514 billion was $52 billion more than for 2016.
Interest cost ended $2 billion lower than projected to August this year and should and the cost should decline even more going forward, with the recent cut in Treasury bill rates by over 50 basis points.
The government gave up $10 billion in payroll taxes last fiscal year and an additional amount, estimated at $13 billion this fiscal year but the revenues are still well ahead of forecast.
With the buoyancy in tax revenues and lower interest cost on loans the government should have far more room to reform taxes in 2018 and reduce taxes as well as improve allocations for social spending.
No motorists’ benefit from gas tax hedging
September 13, 2015 by
When the government of Jamaican imposed the specific excise tax on automotive fuels of J$7 per litre the motoring public were told that some of the tax would be used partially to hedge against future rise in oil prices on the world market above then current levels.
Motorist would be forgiven, if they felt that part of the funds collected and used to hedge against future sharp rise in the price of fuel, would also be used to cushion the price at the pumps that would jump as a result of upward price movement of oil. Based on information contained in the latest report from the International Monetary Fund (IMF) on their assessment of Jamaica’s performance under the extended fund facility, motorist seem unlikely to benefit from any easing at the pumps in the future, should the price jump back sharply on the world market for petroleum.
“Part of the proceeds from this tax package, have been allocated to an energy stabilization fund to both purchase a financial hedge against a future oil price increase and sponsor investments in climate-friendly energy projects. The authorities and staff concurred that it will be important to ensure a transparent design of the hedging instrument. Staff advised that the use of any resources from the financial hedge should be focused on mitigating the impact of higher oil prices on the poor and on enhancing fuel efficiency, rather than on stabilizing domestic fuel prices”, the IMF said.
The big question is whether any further hedging will be executed now that the price has slipped back into the low US$40 per barrel with the world flush with oil with technical indicators pointing to even lower prices ahead. In such a scenario, what will the levy of gasoline be used for?
Cut the civil service – IMF message
September 13, 2015 by
Debt servicing cost, wages and related expenses are two big items that have prevented the Jamaican government from performing the role of government the way they ought as money expended on the excess staffing and by and large part of the debt servicing are non-productive expenditure that divert funds from areas of need. It is therefore not surprising that the International Monetary Fund (IMF) has placed a great deal of focus on these two areas in getting the government to reform the system and move the country intro economic equilibrium. The Fund is of the view that in spite of the move to contain the wage bill by constraints and attrition, more is needed to be done to restore balance in this area.
“Public sector reform is a key pillar of the fiscal consolidation effort over the medium term. The authorities aim to reduce the wage bill from a projected 9.9 percent of GDP in fiscal year 2015/16 to 9 percent of GDP in fiscal year 2016/17. To date, much of this lower spending has been driven by nominal wage freezes, and authorities aim to secure continued moderate wage increases in the context of the ongoing wage negotiations, mindful of the trade off with other spending priorities. There is, however, a need to refocus attention on modernizing the public sector and transitioning toward a smaller and more effective civil service”, the IMF review report says.
The target is steep a cut from 9.9 to 9 percent is a 10 percent change. The wage settlement for 2015 is 4 percent and if all of that was paid in the current fiscal year it would require nominal gross domestic product to rise around 5 to 6 percent. With inflation looking very subdued and real growth not looking robust, the target is likely be a big challenge. The other issue is that even if the government were to achieve the target is, will maintaining it be sustainable long term? The government can cut the number of workers and the wage bill by divesting some services rather than lay workers off.
JMMB managed funds jump 51%
August 16, 2015 by
JMMB Group enjoyed a big jump in the total amount of managed funds being handled by the group in addition to the $223 billion that the group has on its balance sheet.
Off balance sheet funds jumped 51.2 percent to $58.8 billion, compared to J$38.9 billion for the prior year and is consistent with the Group’s strategy of moving assets off balance sheet as well as the dictates of the International Monetary Fund and the country’s Financial Securities commission. JMMB would be using the slate of Unit Trust as vehicles for shifting funds from on balance sheet to off balance sheet.
This trend is not peculiar to JMMB as other institutions have been on this path for some time. Effective October last year the Financial Services Commission, set a minimum amount for a retail repo. Currently the level is J$500,000 and US$5,000 and is scheduled to be increased on a phased basis to $1 million and US$10,000 by the end of December, this year.
JMMB stated in it release with the quarterly results to June that “the Group is now poised to expand its range of services in the Dominican Republic with the approval of its money market mutual funds”.
