Jamaica's Net International Reserves pass US$5 billion mark for the first time ever

Jamaica has hit a major milestone as the country's Net International Reserves have surpassed US$5 billion for the first time ever

Wednesday, 1st May 2024

Jamaica's Net International Reserves pass US$5 billion mark for the first time ever

Jamaica: Prime Minister Andrew Holness announced that Jamaica has hit a major milestone as the country's Net International Reserves have surpassed US$5 billion for the first time ever. The numbers signify that Jamaica has more money saved up in foreign currencies, which is crucial for the economy. It will help the administration to handle economic ups and downs and encourage more investment in the country. While sharing the development on his official Facebook account, PM Holness said that this investment would lead to more jobs, more income, and better lives for all Jamaicans. He outlined, "Hitting this record high is a big win for Jamaica's future growth and stability!" The Prime Minister also noted that this also signals that the government is better prepared to handle unexpected problems, such as natural disasters or global changes, without facing any major setbacks. The development was initially announced by the Minister of Finance of Jamaica, Nigel Clarke, who said that this should not go unnoticed. The Minister said that for the very first time, Jamaica's Net International Reserve passed the US dollar $5 billion mark. As of March 31st, 2020 Jam, aica's gross reserves stood at a historic high of 5.231 billion USD, and Jamaica's net international reserves totalled 5.137 billion USD, which is also a record high. [caption id="attachment_70994" align="aligncenter" width="500"]

For the first time, Jamaica’s Net International Reserves passed the US$5 billion mark[/caption] Minister Clarke said that Jamaica's history contains painful and enduring lessons of the chronic economic vulnerability, volatility, and distress that in large part arise from having insufficient foreign exchange reserves in the central bank. He further added that "Jamaica is an open economy by virtue of the fact that, as a small island, we depend on the outside world for so much of what we consume." According to the World Bank, trade in goods and services is around 90% of GDP for Jamaica and this is what the government means by the country having an open economy for the United States. The Minister also said that the World Bank's comparative statistic is approximately 27%, and Jamaica also has a liberalized foreign exchange regime with a floating exchange rate, meaning, "Anyone can buy or sell any amount of foreign exchange at any time without permission from anyone." Being a country of small size while having an open economy with a liberalized foreign exchange regime makes it imperative that Jamaica has strong levels of foreign exchange reserves, added the Finance Minister. Talking about economic growth, the Minister added that if the country wants economic growth and development, it should be economically resilient and more economically independent. Economic growth requires investment levels, and pricing of investment are linked to real and perceived levels of economic and investment risk. "Having a high level of reserves lowers economic and investment risk and supports greater levels of investment. Increasing investment is necessary to support jobs, revenues, and improved standards of living," he added.

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Nigel Clarke said that economic resilience means that Jamaica can bear economic shocks, whether they be from geopolitical tension, war, commodity, price-related, or natural disaster sources. "And these shocks, though they may lead to temporary setbacks, economic resilience means that they don't derail our plans because we recover quickly," he added. The Minister emphasized that a high level of foreign exchange reserves is, therefore, a necessary precondition for achieving what we want for the Jamaican economy, one that sustainably supports jobs, growth, and development while maintaining economic strength and economic resilience.