Jamaica’s reserves rise as borrowed foreign funds enter the balance

Jamaica’s net international reserves increased by US$541 million in September to approximately US$7.2 billion, according to Radio Jamaica’s report. The August balance was about US$6.6 billion.

The monthly change is reported more precisely than the rounded balances, so subtracting the headline totals gives a different result.

Foreign assets rose by US$538 million. Radio Jamaica attributes part of the increase to proceeds from the Government’s recent US$1 billion borrowing and foreign-exchange sales through the Bank of Jamaica. Borrowed foreign currency can strengthen the reserve buffer while creating a repayment obligation elsewhere in the public balance sheet.

The report gives no complete breakdown of how each transaction contributed to the reserve movement.

Currency and deposits at the Federal Reserve Bank of New York increased by US$532.6 million to roughly US$3.9 billion. The corresponding August figure was about US$3.4 billion. This was the largest reported component movement.

Foreign securities increased by US$6.71 million to approximately US$3.1 billion, from a rounded US$3 billion.

Special Drawing Rights declined by about US$1 million to US$161 million, from US$162 million. Jamaica’s IMF reserve position fell by US$0.25 million, from US$37.44 million to US$37.19 million. Both declines were much smaller than the increase in currency and deposits.

Net international reserves measure reserve assets after relevant short-term foreign liabilities are deducted. This is a defined external-buffer measure.

Government borrowing can increase foreign-currency assets while creating a repayment obligation. September’s reserve rise therefore combines a larger buffer with the financing context behind part of the increase.