Bank Of Jamaica Announces Monetary Policy Adjustment
Bank Of Jamaica Announces Monetary Policy Adjustment . (MENAFN - Caribbean News Global) By Andrew Laidley
  KINGSTON, Jamaica, (JIS) –  The Bank of Jamaica (BOJ) announced a reduction in its policy interest rate to 6.25 percent, effective November 22, ...
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(MENAFN- Caribbean News Global) By Andrew Laidley

KINGSTON, Jamaica, (JIS) – The of Jamaica (BOJ) announced a reduction in its policy interest rate to 6.25 percent, effective November 22, 2024, during the Monetary Policy Committee (MPC) meetings, held on November 19 and 20, reflecting the current economic environment and a positive inflation outlook.

The policy interest rate determines the levels of the rest of the interest rates in the economy, since it is the price at which banks obtain money from the Central Bank. These banks will then offer products, such as loans to their clients at an interest rate that is normally based on the policy rate.

BOJ Governor, Richard Byles, announced at the central bank's Quarterly Monetary Policy Report press conference, on November 25. Governor Byles noted that the MPC unanimously agreed to lower the policy rate by 25 basis points, citing a stabilisation of inflation within the bank's target range of 4.0 to 6.0 percent.

As of October 2024, annual headline inflation was reported at 4.9 percent, down from 5.7 percent in September, indicating a favourable trend following the temporary price disruptions caused by hurricane Beryl.

Core inflation, which excludes items such as food and fuel, stood at 4.5 percent in October, marking the sixteenth consecutive month below the critical threshold of 6.0 per cent. The BOJ anticipates that inflation will remain broadly within its target range, supported by declining international grain prices and easing inflation expectations among the private sector.

“The sources of inflation in the economy have been moderating, and inflation is projected to remain broadly within the bank's target range over the next two years,” said Governor Byles.

Despite recent fluctuations in the exchange rate, the foreign exchange market remains relatively stable, bolstered by the bank's robust foreign reserves.

“The exchange rate has depreciated by 2.1 percent on a year over year basis at November 19, 2024, which is a mild uptick when compared to the 1.1 percent depreciation for the same period a year ago,” Governor Byles stated.

Monetary-Policy-Press-Statement-November-25-2024

The BOJ sold over one billion US dollars via its B-FXITT facility over the last 12 months to the end of October 2024, compared to US$947 million sold over the similar 12-month period at the end of October 2023.

However, it is important to note that the bank net purchased approximately US$1.2 billion over the 12 months to October 2024, which in part resulted in gross reserves increasing to US$5.7 billion at the end of October 2024.

In the meantime, potential economic policy changes with Jamaica's main trading partners pose risks to investment and remittance flows, which could affect inflation expectations.

The MPC emphasised its commitment to maintaining stability in the foreign exchange market and indicated that future interest rate adjustments will be gradual and data dependent.

The next announcement regarding monetary policy will be made on December 20, 2024.

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2024-11-26
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(MENAFN - Caribbean News Global) By Andrew Laidley
  KINGSTON, Jamaica, (JIS) –  The Bank of Jamaica (BOJ) announced a reduction in its policy interest rate to 6.25 percent, effective November 22, ...
Bank Of Jamaica Announces Monetary Policy Adjustment