Bank of Jamaica’s (BOJ’s) Monetary Policy Committee (MPC), during its meetings on June 25 and 26, determined that its current policy stance continues to be appropriate to support inflation remaining within the target range over the next two years.

This view is in a context of continued uncertainty around global trade policy and the path of interest rates in the major developed markets, as well as recent geopolitical developments that have shifted inflation risks to the upside.

The committee, therefore, unanimously agreed to (i) hold the policy rate (the rate offered to deposit-taking institutions (DTIs) on overnight placements with BOJ) at 5.75 per cent per annum, and (ii) continue taking measures to preserve relative stability in the foreign exchange market.

While the risks to the inflation forecast are skewed to the upside (which means that inflation could be higher than projected), the bank expects inflation to remain within its target range of 4.0 to 6.0 per cent over the next eight quarters.

The private sector’s expectations of the level of inflation in the future, a key driver of headline inflation, have stabilised. Other international drivers of headline inflation, such as grains, liquefied natural gas and oil prices, have generally trended down. However, geopolitical tensions, if prolonged or intensified, could cause upward pressures on international commodity prices.

In addition, while the direct impact on domestic inflation of recent changes in global trade policy is expected to be moderate, the second-round impact of these policies could be higher than anticipated.

Of note, inflation has remained stable within the Bank’s target range of 4.0 to 6.0 per cent since September 2024. Annual headline inflation at May 2025, as reported by the Statistical Institute of Jamaica (STATIN), was 5.2 per cent, in line with the outturn at May 2024. Core inflation (which excludes the prices of agricultural food products and fuel from the consumer price index (CPI)) was 4.6 per cent at May 2025, remaining below the upper limit of the target since July 2023. 

The MPC reaffirms its commitment to maintaining low and stable inflation and will deploy the tools necessary to preserve stability. To this end, the Committee will continue to monitor the incoming data and adjust its policy accordingly.