SOLOMON Islands’ gross foreign reserves stood at almost $4 billion in March, an increase of two per cent over the previous month’s level, according to figures released this week.
Higher donor funding and fishing licencing fees during the month contributed to the increase.
“The level of gross foreign reserves as at the end of March 2015 stood at $3, 986 million (about $4 billion), an increase of two per cent on the previous month’s figure of $3, 895 million (about $3.9 billion).
“This resulted from higher donor and fishing licensing inflows during the month. This level of foreign reserves is sufficient to cover 10.1 months of imports of goods and services,” commentary on the figures show.
The strong foreign reserve figure comes at the back of figures released on Monday which showed the Government recorded more than $364 million surplus in the first quarter of this year.
It said foreign reserves are expected to gradually fall in the medium term based on a number of factors including declining revenue from logging, continued high imports and a reduction in foreign aid.
However, the data released this week showed that the foreign reserve should remain well above the three months’ import cover benchmark, sufficient to ensure exchange rate and monetary stability.
The data also show that the nation’s current account deficit (CAD) widened to around five per cent of GDP last year from 4.6 per cent of GDP the previous year. This reflects a sharp fall in gold exports, development partner assistance and other primary income sources.
The trend is expected to continue to around 61/2 per cent of GDP this year.
By ALFRED SASAKO
Govt’s media consultant