Durrant Pate/Contributor

While acknowledging the recent contraction in inflation, the Bank of Jamaica (BOJ) is not ready to change its monetary policy stance of higher interest rates to tame rising prices.

Our Today reported on Tuesday (April 16) that inflation has gone down for another consecutive month to now be in the BOJ’s upper target band of six per cent, according to the Statistical Institute of Jamaica.

In a statement today, the BOJ says its “Monetary Policy Committee will continue to closely watch the inflation numbers and other incoming data over the ensuing months to assess the extent to which the current level of inflation will be sustained, before making a determination on whether to change the Bank’s monetary policy stance.”

The central bank reports that it has taken note of the zero-to-five per cent inflation contraction in March noting that the 12-month point-to-point inflation (March 2023 to March 2024) was 5.6 per cent, which is within its target range.

The BOJ says it welcomes the reduction in headline inflation, which was 0.6 percentage points lower than the 6.2 per cent point-to-point inflation rate for the period February 2023 to February 2024 and also lower than our most recent forecast.

“The bank notes that this is the second consecutive month of decline in headline inflation, which is a positive development, and the first time that the inflation outturn was within the Bank’s target range since October 2023. The analysis of the inflation numbers shows that the downward movement in the Consumer Price Index (CPI) for the month of March 2024 was largely influenced by a 1.8 per cent decline in the index for the heaviest weighted division, Food and Non-Alcoholic Beverages,” the BOJ said in its press statement.

While the BOJ had anticipated a decline for this division, it says the contraction was larger than expected and reflected reductions in the prices of some agricultural produce, such as tomato, yam, sweet potato, cabbage and carrot.