BOJ holds interest rate at 5.75 per cent for another month
/ Our Today
administrator
The Bank of Jamaica (BOJ) has decided to hold its benchmark policy rates at 5.75 per cent per annum for another month.
The BOJ’s Monetary Policy Committee (MPC) unanimously made the decision during its meetings, September 25-26, where it deliberated on its monetary policy stance in the context of continued low domestic inflation, global uncertainties and evolving interest rate trajectories in major developed countries.
In addition to holding steady its policy rate, which is the rate offered to deposit-taking institutions (DTIs) on their current account balances at BOJ, the MPC also decided to continue taking measures to preserve relative stability in the foreign exchange market.
The decision was premised on the fact that while headline inflation of 1.2 per cent at August 2025 is below the BOJ’s target range of 4.0 to 6.0 per cent, core inflation continues to track within the target range. Additionally, the causes of the low headline inflation rate in August 2025 are primarily temporary, related to improvements in supply conditions.
In particular, agricultural prices during the month were lower than a year earlier, when prices rose due to the negative impact of Hurricane Beryl on domestic crop production. Supplies improved subsequent to the adverse weather, leading to prices reverting to more normal levels.
In addition, the dissipation of the impact of a previous adjustment in public transport fares, as well as a reduction in the General Consumption Tax (GCT) on electricity consumption announced by the Government in March 2025, contributed to lower-than-targeted inflation.
Notwithstanding these temporary shocks, core inflation (which excludes the prices of agricultural food products and fuel from the Consumer Price Index was 4.2 per cent at August 2025, remaining within the target range since March 2025. The MPC also points to the low headline inflation rate at August 2025, which it says is unrelated to demand conditions, noting that the risks to the inflation outlook are skewed to the upside as two other reasons for holding its benchmark interest rate steady.
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