The NetInternational Reserves (NIR) regained strength in February, new central bank figures show, in a period when the Jamaican dollar has been holding its own in the foreign exchange market.

For the past few weeks, the central bank has been absent from the market, its two interest rate hikes having done the job of teasing investor funds away from the foreign exchange holdings.

Concomitantly, the NIR, from which the Bank of Jamaica draws down funds to sell into the market when demand pressures weigh on the JMD, gained US$137 million to close the month at US$1.956 billion.

Within the same period, the dollar which had been under constant pressure in January, and parts of February, regained 47 cents of its value in the month of February, and has since appreciated further to $71.17 this week - its best performance since the latter half of January.

In its last projection on NIR targets, the central bank said it expects to end the fiscal year at March 2008 with reserves of US$1.73 billion.

The February outturn pushes the Bank of Jamaica ahead of that target. But the central bank is more than a quarter of a billion dollars off the original fiscal target of US$2.2 billion.

business@gleanerjm.com

Taken from the Financial Gleaner, Friday, March 14, 2008.