Bank of Jamaica: Jamaica’s Net International Reserves in excess of $2 billion

(Jamaica Observer) – The Bank of Jamaica (BoJ) has reported that Jamaica’s Net International Reserves (NIR) is in excess of US$2 billion as at the end of October 2011.

The figure of US$2.032 billion, though a reduction of US$48.40 million over the US$2.080 billion recorded at the end of September, represents more than 20 weeks of imports of goods and services, and will continue to provide some cushion and insurance for the future.

The rule of thumb employed by many analysts is that the reserves should be sufficient to pay for 12 weeks of imports of goods and services. By this measure Jamaica’s reserves are now in a reasonable comfort zone.

The NIR represents contingency funds, which can enable the country to survive severe external shocks, to cope with shifts in investor confidence and natural disasters.

While the reserves are not credited to the country’s revenues, they provide confidence to the markets that external obligations can be met.