Bank of Jamaica paid back US$30 million to the International Monetary Fund (IMF) during September, but the Net International Reserves (NIR) climbed from US$2.12 billion at the end of August to US$2.2 billion at the end of September, an increase of US$79 million.
Gross reserves amounts to $2.72 billion compared with $2.67 billion at the end of August.Estimated Official Gross Reserves represent 27.17 weeks of Goods Imports at the end of September, up from 26.68 weeks, in August and 19.52 weeks of Goods and Services Imports, an increase over the 19.17 weeks in August.
The reserves place the central bank in a good position to intervene in the foreign exchange market during the rest of the year, if they so desire. Importantly, it gives them the physiological advantage to keep speculators guessing as to their next move, now that the rate of the Jamaican dollar has been gaining, against the US dollar, since they had a major intervention, in the market on July 10.
Interestingly, the months of high demand and low supply commencing September, should end by Mid December has so far seen no serious dip in supply and no large demands, allowing the local dollar to appreciate. There are some indications that financial institutions who went long in their holdings of foreign exchange, have been offloading, with the absence of any serious overhang of demand that cannot be satisfied.
It does appear that the central bank will be adding to its holdings of foreign currency, as investors reduce their holdings, with the winter months not far away, a period when supply is usually higher than demand.