Summary of Decisions – November 2025

Summary of
Monetary Policy Discussion and Decisions
November 2025

During its meetings on 20 and 21 November 2025, the Monetary Policy Committee (MPC) of Bank of Jamaica (BOJ) deliberated on its monetary policy stance in the context of the post-Hurricane Melissa environment and expressed its concern regarding the devastation caused by the hurricane and the considerable hardship and dislocation being suffered by many Jamaicans. The MPC determined that preserving a stable macroeconomic environment is essential to the recovery effort at the individual, household and national levels. In this regard, Bank of Jamaica (BOJ) remains committed to ensuring that the inflationary effects of the hurricane are managed in order to  limit the hardships on vulnerable groups and to facilitate the conditions necessary for long-term economic recovery.

Following the deliberations, the Committee decided unanimously to (i) hold the policy rate (the rate offered to deposit-taking institutions (DTIs) on their current account balances at BOJ) at 5.75 per cent per annum, and (ii) take special pre-emptive measures to preserve relative stability in the foreign exchange market.

The MPC noted that the decision to maintain the policy rate is based on the following factors:

1. Annual headline inflation will rise sharply from 2.9 per cent, it’s outturn at October 2025 and will exceed the Bank’s inflation target of 4.0 to 6.0 per cent over the near-term. The rise in inflation reflects the impact of the hurricane on the major food -producing parishes and the second-round impact on the prices of other selected goods and services (such as routine household maintenance, transport, energy and personal care items).
2. Core inflation (which excludes the prices of agricultural food products and fuel from the consumer price index (CPI)) will also rise, breaching the target range in mid-2026.
3. The Government has signalled a temporary suspension of the fiscal rules to support the relief and recovery effort, which will facilitate increased spending in the economy.
4. The risks to the inflation outlook are skewed to the upside. Higher inflation could result from higher-than-expected domestic demand to support reconstruction efforts, as well as higher-than-anticipated inflation expectations. There could also be long-term damage in specific industries which could slow the improvement in the production and availability of supplies. On the downside, inflation could be lower due to a slower-than-anticipated recovery in domestic demand associated with income loss.
5. Without the MPC’s policy actions, which are carefully designed to limit inflationary impulses, ensure adequate supplies and support stability in the foreign exchange market, headline inflation will remain elevated for an extended period of time.

The special pre-emptive measures in the foreign exchange market contemplate the need for increased imports to support the rehabilitation and reconstruction efforts. The MPC notes that the Bank’s strong international reserves reinforce its ability to support the foreign exchange market. In this regard, the Bank has sold US$210 million to the market since the passage of the hurricane. Going forward, in the short term, the Bank will also (i) provide foreign currency liquidity directly to selected entities in the energy sector and (ii) proactively ensure adequate foreign currency liquidity in the market, including the reintroduction of scheduled advanced notices of intervention sales.  Bank of Jamaica is prepared to deploy other measures to maintain orderly conditions in the exchange rate market, as needed.

Holding the policy rate unchanged, complemented by the proactive measures to ensure stability in the foreign exchange market, will enable inflation to return to the target range by early 2027.

The following considerations also informed the MPC’s decisions:

1. The Statistical Institute of Jamaica, reported that annual headline inflation at October 2025 was 2.9 per cent. The outturn, which was inline with projections, was below the Bank’s target range of 4.0 per cent to 6.0 per cent due to moderating services inflation arising from lower communication cost. In addition, imported and agricultural inflation moderated due to lower commodity prices and increased agricultural supplies, respectively. Core inflation (which excludes the prices of agricultural food products and fuel from the consumer price index (CPI)) was 3.7 per cent at October 2025, falling below the lower end of the Bank’s target due to moderating inflation expectations.

2. The outlook for real economic activity for fiscal year (FY) 2025/26 and FY2026/27 has deteriorated relative to the last forecast due to the extensive damage to infrastructure and disruption to productive activity and livelihoods. The economy is therefore projected to contract significantly over the near-term, resulting from fallouts in most sectors due to the adverse impact of Hurricane Melissa.
3. In September 2025, headline inflation in the US increased to 3.0 per cent from 2.9 per cent in August 2025. Inflation in the US is projected to remain above the US Federal Reserve’s (Fed) target of 2.0 per cent for the remainder of 2025.
4. The Fed reduced its monetary policy target for interest rates by 25 basis points to a target range of 3.75 to 4.00 per cent in October 2025. The Federal Reserve Chair noted that while economic activity has been expanding at a moderate pace, the unemployment rate has increased. At the same time, inflation has increased and remains somewhat elevated. The Fed Chair noted that the recent Government shutdown may warrant a more conservative monetary policy decision in the upcoming December 2025 meeting. However, future monetary policy decisions will continue to be based on the incoming data.
5. The outturns for selected external indicators were mixed as oil prices declined while grains and liquefied natural gas (LNG) prices increased. The average of daily West Texas Intermediate (WTI) crude oil prices for September and October 2025 declined by 3.1 per cent, a larger decline than the Bank’s forecast. Prices marginally declined in November 2025 to date, supported by reports from the Energy Information Administration (EIA) indicating a build-up in US inventories and expectations for an increase in global production in 2025 and 2026. For LNG, average prices for September and October 2025 increased by 7.8 per cent, relative to the projection for a smaller increase over the period. This is supported by increased domestic and export demand. Average grains prices (wheat, corn and soybean) increased for September and October 2025 by 0.8 per cent, compared with the Bank’s projection for a decline for the period. International fertiliser prices, increased by 5.4 per cent in September 2025.
6. BOJ’s September 2025 survey of businesses’ inflation expectations indicated that respondents expected inflation 12 months ahead to be 5.8 per cent, relative to 7.0 per cent in the previous survey.
7. The domestic banking system remains sound with adequate capital and liquidity.
8. The domestic fiscal policy stance poses some risk to inflation over the near-term.
9. The MPC remains committed to its work programme to further strengthen the policy transmission process and reaffirms its commitment to maintaining low and stable inflation. To this end, the Committee will continue to closely monitor the incoming data and maintain heightened surveillance of the second-round impact of higher food prices on core inflation. The MPC is prepared to adjust the stance of monetary policy if the above-noted risks crystallise and threaten the projected return of inflation to target.

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Richard BylesChairman of the MPC
24 November 2025