Bank of Jamaica Maintains 5.75 Per Cent Policy Interest Rate

The Bank of Jamaica (BOJ) has announced that its policy interest rate offered to deposit-taking institutions (DTIs) on overnight placements with the BOJ will be maintained at 5.75 per cent per annum.

This decision was reached during the Monetary Policy Committee (MPC) meetings held on September 25 and 26. The Committee is chaired by BOJ Governor Richard Byles.

The BOJ indicated that the decision to maintain the policy rate was based on several key factors.

Among the reasons cited is the continued stability of core inflation, which remains within the BOJ’s target range of four to six per cent, despite headline inflation registering at 1.2 per cent as of August 2025.

Other contributing factors include the Bank’s assessment that the low headline inflation rate recorded in August 2025 is not reflective of subdued demand conditions, and that risks to the inflation outlook remain skewed to the upside.

The Central Bank projects that the current low headline inflation rate is temporary, attributing it primarily to improvements in domestic supply conditions.

It noted that agricultural prices in August 2025 were significantly lower than in the corresponding period last year, when Hurricane Beryl’s impact in July 2024 had driven prices upward.
Agricultural supplies have since improved, resulting in food prices reverting to normal levels.

Additionally, the dissipation of the impact of previous adjustments to public transportation fares, as well as the reduction in the General Consumption Tax (GCT) on electricity consumption, announced by the Government in March 2025, contributed to the lower than targeted inflation.

The BOJ stated that, notwithstanding these temporary shocks, core inflation—which excludes the prices of agricultural food items and fuel from the Consumer Price Index (CPI)—stood at 4.2 per cent as of August 2025, remaining within the target range since March 2025.

Citing recent developments, the BOJ projects that headline inflation will remain below the lower bound of its target range for the remainder of 2025.

However, it is expected to return to the four to six per cent range by the March 2026 quarter, as temporary supply-side influences dissipate and demand conditions normalise.