BOJ reduces policy rate to six percent effective December 23

 





The Bank of Jamaica (BOJ) indicates that it will reduce the policy rate by 25 basis points (bps) to 6.00 per cent per annum, effective Monday, 23 December 2024.

 

The action is based on Monetary Policy Committee (MPC) meetings on 18 and 19 December 2024, it said, which assessed that the prevailing economic environment is conducive to a further easing of its monetary policy stance.

 

The BOJ also aims to  preserve relative stability in the foreign exchange market. The lowering of the policy rate represents the fourth consecutive reduction for 2024.

 

“This decision to ease monetary policy based on inflation becoming anchored in the target range. Further, despite the impact of recent adverse weather on prices, inflation is expected to remain in the target range.” The central bank stated in its release.

 

Annual headline inflation at November 2024, as reported by the Statistical Institute of Jamaica (STATIN), was 4.3 per cent, representing a trend reduction from 7.4 per cent at January 2024.

 

Core inflation (which excludes the prices of agricultural food products and fuel from the consumer price index (CPI)) was 4.2 per cent at November 2024, representing the seventeenth consecutive month that core inflation fell below 6.0 per cent.

 

The BOJ stated. “The deceleration in headline inflation over the year to November 2024 primarily reflected stability in some of its key drivers. The foreign exchange market and the private sector’s expectations about the level of future inflation remained relatively stable over the year.

 

“Anecdotal information suggests that wage pressures moderated in October 2024. This moderation was generally in line with projections. The non-recurrence of increases in selected administered prices also supported lower inflation. Further, despite the impact of recent adverse weather on agricultural supplies, which moved agricultural food prices upward, agricultural food price inflation was less than anticipated.”

 

The BOJ said that over the next eight quarters, inflation is likely to remain within the Bank’s target range apart from  uncertainty associated with the potential changes to economic policies among Jamaica’s main trading partners. However, the timing and the extent of the policy changes are still highly uncertain.

 

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