JPMorgan, a leading global financial services firm, expects Jamaica's net international reserves (NIR) to fall to US$1.1 billion by yearend.
It also noted that some view the local currency as overvalued.
"We expect reserves to drop 44.1 per cent year-on-year to US$1.1 billion (7.1 per cent of projected GDP) this year," said JPMorgan, adding that level would half the pre-crisis peak of US$2.32 billion (19.5 per cent of GDP) in 2006.
Efforts at comment from Franco Uccelli, the name linked to the JPMorgan release, were unsuccessful.
JPMorgan is part of the JPMorgan Chase & Company group with assets of US$2.3 trillion.
The NIR "plunged" to US$1.26 billion in September, representing a 36 per cent drop year-on-year. But JPMorgan remained balanced in its analysis arguing that it still offered adequate coverage.
"Despite the sharp year to date drop, Jamaica's reserves still cover 18.7 weeks of goods imports, significantly higher than the 13.5-week coverage in December 2009," stated the report.
The international benchmark is 12 weeks of NIR coverage.
JPMorgan said September's monthly contraction was underpinned by a seven per cent month-over-month decrease to US$2.12 billion in foreign assets (primarily currency and deposits) held by the Bank of Jamaica, and a 1.3 per cent increase to US$858 million in its foreign liabilities (debt owed to the IMF).
It finally stated that the "central bank continues to defend what many observers believe is an unsustainable exchange rate".
The Jamaican now trades above J$90 to US$1.
Central Bank Governor Brian Wynter in August said the depreciation was due to short-term jitters associated with finalising an International Monetary Fund agreement. The local dollar has lost 4.7 four per cent of its value year to date, closing at J$90.65 on the spot market Wednesday, or close to four dollars above the J$86.60 spot rate at the end of December 2011.
The Bank of Jamaica projects that the NIR will close the fiscal year, ending March 2013, at US$1.66 billion.