What the IMF said recently about Jamaica

On September 11, 2015 the IMF published figures on Jamaica’s International Reserves and Foreign Currency Liquidity. The report showed that “Official Reserve Assets” stood at US$2,775.63 Million. 

Additionally, it showed “short-term domestic currency debt indexed to the exchange rate” at US$59.39 Million.  

In the footnotes to the report the IMF stated “In principle, only instruments denominated and settled in foreign currency (or those whose valuation is directly dependent on the exchange rate and that are settled in foreign currency) are to be included in categories I, II, and III of the template. Financial instruments denominated in foreign currency and settled in other ways (e.g., in domestic currency or commodities) are included as memo items under Section IV.”

A subsequent press release, on September 23, 2015, announced “IMF Executive Board Completes Ninth Review Under the IMF's Extended Fund Facility Arrangement for Jamaica and Approves US$39.7 Million Disbursement”.

In the press release Mr. Min Zhu, Deputy Managing Director and Acting Chair, is quoted the as making the following statement:

“The authorities remain firmly committed to the economic program supported by the Extended Fund Facility. Program performance is on track and structural reforms have progressed broadly on schedule.

Macroeconomic fundamentals continue to strengthen. Inflation is at a historical low and the current account is improving, aided by declining oil prices. The recent upgrade in the credit ratings followed by the large international bond placement signaled improved investor confidence in Jamaica’s reform program. But growth remains weak and unemployment needs to decrease further. Sustained efforts in structural reforms, including by reducing energy costs, improving the business environment, and developing critical infrastructure, should help boost investment and growth.

The recent Petrocaribe debt buyback has lowered the ratio of public debt to GDP, which the ongoing fiscal consolidation should maintain firmly on a downward path. Nonetheless, it is essential to move forward with public sector reforms, including as regards public financial management, to improve the efficiency of government services. It is also important to continue strengthening fiscal revenue by reforming customs and tax administration and broadening the tax base.

Recent steps to loosen the monetary stance should support credit creation, while maintaining price stability. The completion of the transition of the retail repo contracts to a trust-based framework represents a milestone in buttressing financial sector stability.”

What will the IMF have to say after the Tenth Review? Only time will tell...