JIS News

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  • The Bank of Jamaica (BoJ) is reporting that the rate of inflation declined to 3.8 per cent over the 12-month period ending July 31, 2015, which is the lowest rate in more than 43 years.
  • Governor of the bank, Brian Wynter, said the rate is 5. 2 per cent lower than the figure recorded for the corresponding period ending July 31, 2014, which stood at nine per cent.
  • Mr. Wynter attributed the fall in the inflation rate primarily to movements in prices, which he said, fell during the early part of the 2015 calendar year, and latter part of 2014.

The Bank of Jamaica (BoJ) is reporting that the rate of inflation declined to 3.8 per cent over the 12-month period ending July 31, 2015, which is the lowest rate in more than 43 years.

Governor of the bank, Brian Wynter, said the rate is 5. 2 per cent lower than the figure recorded for the corresponding period ending July 31, 2014, which stood at nine per cent.

He made the disclosure while addressing the BoJ’s quarterly media briefing on August 26, at the Bank’s auditorium, downtown Kingston.

Mr. Wynter attributed the fall in the inflation rate primarily to movements in prices, which he said, fell during the early part of the 2015 calendar year, and latter part of 2014.

He said the BoJ’s inflation expectations survey, conducted in July 2015, reveals that expected inflation, 12 months ahead, has fallen to 4.0 per cent. “This compares with the 5.1 per cent that I (projected earlier this year), and represents a new record low in the history of the survey,” he stated.

The Governor said the BoJ forecasts that the 12-month inflation rate will continue to fall through to the end of September, before rising in the second half of the 2015/16 fiscal year, “to end within our target range of 5.5 to 7.5 per cent.”

He said the Bank is optimistic that, barring unforeseen adverse developments or events, “our inflation target is going to be met.”

Mr. Wynter said against this background, the BoJ reduced the signal interest rate on its 30-day certificate of deposit earlier this month, by 25 basis points to 5.25 per cent per annum.

This, he advised, followed a similar reduction in April, noting that this is the “lowest policy rate since Jamaica adopted liberalised financial market practices a quarter of a century ago.”

 

Further, Mr. Wynter said the Bank has taken a decision that effective Thursday, August 27, the interest rates at which it provides liquidity to deposit taking institutions “will be reduced by 50 basis points.”

“So, for example, the rate on the Standing Liquidity Facility, which is an overnight lending facility for banks, was 9.50 per cent in March. At the end of June, it was reduced to 8.75 per cent. With the adjustment I am announcing today, the rate on this facility will fall to eight per cent,” he explained.

Mr. Wynter also advised that consequent of the easing of the BoJ’s monetary policy in April, Treasury Bill and other money market rates fell during the April to June quarter.

“The Bank’s rate cut last week as well as the reduction announced today are likely to have a similar effect on money market rates during this (July to September) quarter,” he added.