BOJ Reduces Interest Rate to 6.5%

The Bank of Jamaica, BOJ, has further reduced its interest rate by 25 basis points to 6.5 per cent.

The reduction comes into effect today October 1.

The decision was made at a recent meeting of the Bank’s Monetary Policy Committee.

The BOJ says it anticipates point-to-point inflation to fall back within the target range of four to six per cent over the next eight quarters.

As at the end of July inflation was 6.5 per cent.

The BOJ says the Jamaican economy over the near term is expected to be affected by the adverse impact of Hurricane Beryl and the lagged effects of monetary policy on spending.

However, the Bank projects that real economic activity for the fiscal year is likely to be better than the last forecast, due to a less negative estimate of the impact of Hurricane Beryl.

Meanwhile, the BOJ says the domestic banking system remains sound with adequate capital and liquidity.

It also says the domestic fiscal policy stance continues to pose no risk to inflation over the near term.