Enough reserves to manage debt post-COVID-19— BOJ governor
Governor of the Bank of Jamaica Richard Byles has indicated that amidst the massive fallout occasioned by the COVID-19 pandemic, there is enough foreign reserves to fulfill Jamaica's debt obligations.
“Unless the pandemic is prolonged for years upon years, we certainly should have enough reserves to deal with all of our debt obligations. The Government has built up a good buffer of cash reserves and the tax has not fallen off to the extent that we will be endangered in any way that we won't be able to pay our debt,” Byles said.
As at the end of May, the country's net international reserves stood at US$2,904.49 million reflecting a decrease of US$228.16 million relative to the US$3,132.65 million in the previous month, which will support imports and payment services.
Byles said that among the raft of measures engaged in mitigating the effects of the pandemic such as the pumping of millions in liquidity into the market, the US$520 million in emergency funding accessed under the International Monetary Fund (IMF) rapid financing instrument (RFI) among others, have all helped to keep the economy going.
He said that with the gradual reopening of the economy and critical sectors such as tourism, the country would be able to put up a better recovery defence to shocks than those undertaken during the periods of the last two crises, which for him took the form of a U-shaped recovery. He opined that those U-shaped sessions were very difficult for the people of the Caribbean and Jamaica. “We entered this situation [crisis] much stronger in terms of our fiscal discipline, exchange reserves, and the strength of our banking system. We don't expect to have a U-shaped recovery, but more a kind of V-shaped recovery,” he said.
“I expect that as soon as we can get the tourism business up and going again, we will be back to where we were last year. We are not tourism-dependent, but it is a major contributor to our foreign exchange earnings and employment.
“We opened our borders just recently, and we are hopeful that we can manage the process of restarting tourism. To a larger extent, our recovery is intertwined with the good management of the spread of the pandemic in countries like the US, Canada, and the United Kingdom,” he added.
Byles gave his views while speaking on Thursday last (June 26) at a live streaming of the annual Caribbean Economic Forum, which for the first time saw himself along with three other central bank governors of the region take part in a joint public event to discuss how the Caribbean will rebound after COVID-19. The other governors were Timothy Antoine of the Eastern Caribbean Central Bank, Dr Gobind Ganga of the Bank of Guyana and the incoming chairman of the governors of the Central Banks of the Caribbean, and Central Bank of Barbados Governor Cleviston Haynes. The governors all concurred that the COVID-19 pandemic had been a “truly disruptive event”, which has strained jobs, health care systems, businesses, and economies right across the region.
The forum spearheaded by the Central Bank of Barbados was the first in a series of several other fora that will be held from June-November on the fourth Thursday of each month. The event is the virtual spin-off of the in-person event the bank hosts annually.