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Barita Investments Limited expects the Bank of Jamaica, BOJ, to defend the dollar against sharp swings, and hold interest rates steady until next year to spur the rebuilding of infrastructure and livelihoods in the wake of Hurricane Melissa.
As such, the investment company expects the foreign exchange market to remain stable. “We do not expect any sharp disruptions going forward on account of the passage of Hurricane Melissa,” said Richardo Williams, Barita’s vice-president of asset management and research.
The Jamaican dollar settled at $161.26 against the US dollar, depreciating by 26 cents since the hurricane, which struck on October 28.
The BOJ has been running advertisements featuring Governor Richard Byles, who has signalled the central bank’s willingness to intervene in the foreign exchange market to maintain stability, which Williams described as “consistent” with central bank actions during economic shocks.
Jamaica’s net international reserves remain above international benchmarks, which means the BOJ has ample capacity to intervene in the market to maintain a fair degree of stability, Williams said during Barita’s quarterly investor briefing on Wednesday.
Jamaica held US$6.1 billion in net reserves, up to October, enough to cover 50.7 weeks of imports, slightly down from 51.3 weeks in September. Data for November is pending.
On the fiscal front, Williams referenced the third supplementary budget released on Tuesday by the Ministry of Finance, which added $29.3 billion to the national budget to fund recovery from Hurricane Melissa. The largest allocations went to road infrastructure and housing, including the procurement of 3,300 containerised housing units. This expansion lifted the overall budget to around $1.3 trillion.
“It is all about rebuilding going forward,” he said.
The BOJ raised its policy rate from 0.5 per cent in 2021 to 7.0 per cent to combat pandemic-induced inflation, but has since eased it to 5.75 per cent. Lower rates reduce returns on fixed-income investments and encourage investors to seek higher yields in stocks and other capital market assets.
Williams expects the central bank to maintain the policy rate for the next “one or two” policy meetings, as it monitors reduced activity. Rate decisions are due in another two weeks, on December 18, and then in February 2026, if the BOJ holds to its regular annual schedule.
“Once the supply side begins to come back on stream, we then expect the central bank to turn to a more accommodative stance, that is, to reduce interest rates to help in building back the economy,” Williams said.
For its financial year ending September 2025, a 15 per cent reduction in revenue weighed on Barita Investment’s annual earnings, which fell to $3 billion from $3.8 billion.
Barita’s outlook on business is “stable”.
“While there likely will be a slowdown in the usual investment banking-type activities in the market, the flip side to that is the government’s approach to building back,” said Williams, adding that one can expect “fairly robust growth” in the investment banking space.
English (US) ·