Amid escalating pressure around global trade, the Bank of Jamaica, BOJ, continues to take a cautious approach and has held its benchmark lending rate steady for a third straight month.
The rate currently stands at six per cent.
The BOJ blames growing uncertainty around trade policies from the United States, China and Canada for the decision.
Chevon Campbell has that story.
The Bank of Jamaica, BOJ, has decided to hold its policy interest rate at 6 per cent per annum. This remains the third straight month with no change following the central bank’s previously accommodating rate cuts.
However, as a means of easing some of the pressure on interest rates, the BOJ made the decision to reduce its Standing Liquidity Facility, SLF rate, from 8 per cent to 7 per cent.
An SLF is like a money-lending service from which commercial banks can draw on from the central bank to meet short-term needs. It must then be paid back with interest.
The decision was announced on Thursday following the Monetary Policy Committee, MPC’s meetings the previous day.
The central bank says the decision aims to support inflation stability while enhancing monetary transmission mechanisms.
According to the BOJ, the MPC deliberated on the economic uncertainties surrounding the policies of Jamaica’s main trading partners.
Despite these external factors, the Committee concluded that the current monetary policy stance remains appropriate to sustain inflation within the target range over the next two years.
The central bank says the reduction in the SLF margin will lower the cost of short-term liquidity for commercial banks, which is expected to promote stability in short-term market interest rates.
It says this move aligns with the BOJ’s ongoing efforts to strengthen Jamaica’s monetary policy framework.
Inflation data from the Statistical Institute of Jamaica indicates that headline inflation was 4.4 per cent as of February 2025.
This marks a decline from the 6.2 per cent a year earlier.
The BOJ attributes the reduction in inflation to factors such as exchange rate stability, moderated private sector wage pressures, and lower imported inflation.
However, the BOJ cautioned that uncertainties persist, particularly with the evolving trade policies of the United States, China, and Canada.
In another escalation of ongoing trade tensions, the US implemented a 25 per cent tariff on all imported cars.
It says these adjustments could potentially impact imported inflation in Jamaica.
English (US) ·