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  • In a statement on Friday (December 18), the Central Bank said this policy decision is based on its assessment that inflation will generally continue to remain in the 4-6 per cent target range over the next two years.

The Bank of Jamaica (BOJ) is maintaining the interest rate offered on deposit-taking institutions’ overnight placements, at 0.50 per cent.

In a statement on Friday (December 18), the Central Bank said this policy decision is based on its assessment that inflation will generally continue to remain in the 4-6 per cent target range over the next two years.

This is notwithstanding the temporary impact of the recent rains on agricultural prices.

The decision to hold the policy interest rate at 0.50 per cent is consistent with the Bank’s position since early 2020. The accommodative monetary policy aims to support Jamaica’s economic recovery.

Additionally, the Central Bank has proactively implemented several initiatives designed to preserve financial sector stability and maintain seamless foreign exchange market activities.

The BOJ said that while Jamaica’s economic outlook remains “uncertain” within the context of the ongoing Coronavirus (COVID-19) pandemic, it remains “cautiously optimistic, as we continue to assess and monitor new developments, as they emerge”.

The Bank indicated that it will maintain this monetary policy stance until there are clear signs that economic activity in Jamaica is returning to pre-COVID-19 levels.

“There is the possibility of a faster than expected recovery in the economy if the COVID-19 pandemic is effectively contained or a vaccine becomes widely available,” the BOJ said.

 

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