Bank of Jamaica’s Monetary Policy Committee (MPC), at its meetings on 17 and 20 November 2023, unanimously agreed to maintain: (i) the policy interest rate (the rate offered to deposit-taking institutions (DTIs) on overnight placements with Bank of Jamaica) at 7.0 per cent, (ii) tight Jamaican dollar liquidity conditions, and (iii) relative stability in the foreign exchange market.

The decision to maintain the monetary policy stance is based on the MPC’s view that, while inflation at October 2023 fell within the Bank’s target range, it is projected to rise above the target range between the December 2023 and March 2025 quarters. The MPC however noted the downside risks to this outlook, including fiscal measures to counteract the inflationary pressures from recent regulated price increases, the relative stability in core inflation and the prospect of the United States (US) Federal Reserve Board (Fed) maintaining its policy rate in the near future.

Headline inflation fell within the target range for the second consecutive month. The annual inflation rate at October 2023 of 5.1 per cent was below the 5.9 per cent at September 2023, the outturns for the previous four months, and also much lower than the peak rate of 11.8 per cent recorded at April 2022. This October outturn was expected and reflects the third time since April 2023 that inflation fell within the 4.0 to 6.0 per cent target band. Core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) was 5.7 per cent at October 2023, generally in line with the average for the past two months and, lower than the 8.4 per cent recorded at April 2022.

The projected acceleration in inflation primarily reflects the impact of the announced increases in selected public passenger vehicle (PPV) fares in October 2023 and April 2024. The forecast also assumes that oil prices will be elevated over the next three quarters (December 2023 to June 2024). International grains prices are, however, projected to continue to fall in a context of buoyant supplies, while shipping prices are forecasted to remain low and stable, given a projected slowdown in global growth.

The risks to the inflation outlook are, however, skewed to the downside (i.e. inflation could be lower than projected). The main downside risks include the possibility of fiscal measures being implemented to cushion the impact of the increase in PPV fares, which was signalled by the Government. Oil prices could also trend below the forecast. Upside risks to this outlook include higher-than-projected future wage adjustments in the context of the tight domestic labour market, second-round effects from the PPV fare increases, sharp increases in domestic agricultural price inflation over the near term, and worsening supply chain conditions.

Future monetary policy decisions will depend on incoming data related to the relative strength of the risks to inflation noted above. The Committee decided to maintain heightened surveillance of the risks, and is committed to the Bank using the complete set of tools at its disposal to achieve the policy objective. The Committee also noted its preparedness to take the necessary actions, including further tightening of monetary policy, if the emerging upside risks to inflation materialise. As such, the Bank will continue to closely monitor the global and domestic economic environments for these potential risks to Jamaica’s inflation rate.

A summary of the Monetary Policy Committee’s discussions, which influenced the monetary policy decision, has been published on the Bank’s website at

The date of the next policy decision announcement is 20 December 2023.

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Post Author: Editorial Team