Path to a Monetary Policy Decision

Monetary policy decisions are made by a Monetary Policy Committee (MPC) chaired by the Governor with membership comprising of three (3) ex-officio members and two (2) appointed members (independent non-executive external members).

Policy decisions of the Committee are made by majority vote of the members. In addition to the original vote, the Chairman has the casting vote in cases where the vote is tied.

Decisions are taken twice per quarter (eight times during each calendar year) and are based on the recommendations emerging from the Bank’s Forecast & Policy Assessment System (FPAS) (see below for an outline of the forecasting process). This is an intensive process that involves the examination of trends, model projections, expert judgement and scenario analyses of all the major variables that impact domestic inflation.

The results of this process are documented in a comprehensive Monetary Policy Assessment (MPA) report. The MPA report provides a thorough assessment and forecast of key economic indicators for the international economy, which includes developments in key trading partners, a review of the balance of payments, local financial markets as well as updates and forecasts of real domestic activity, inflation, exchange rate and monetary developments.

Bank of Jamaica publishes its monetary policy decisions in accordance with a pre-announced monetary policy schedule.