BOJ Maintains Policy Interest Rate at 7%

December 21, 2022


The Monetary Policy Committee (MPC) of the Bank of Jamaica has unanimously decided to keep the policy interest rate at 7% commencing December 21, 2022. The MPC’s decision was supported by the fact that the outlook for inflation was generally favorable based on the incoming data. The primary outside factors that influence headline inflation, such as the cost of food, gasoline, and shipping, have continued to decline in accordance with expectations set by the Bank.

Additionally, there is still a substantial probability that the GDP would increase by 3.0% to 4.5% in the fiscal year 2022–2023. However, there is a chance that future wage adjustments due to labor shortages in particular industries will push inflation higher.

According to the MPC, interest rates have generally risen in line with the policy rate on the money and capital markets. A few deposit-taking institutions recently made minor changes to their lending and deposit rates and announced future rate rises. The amount of liquidity in the financial system continues to be in accordance with the Bank’s goal of aiding in an inflation decrease.

The US Federal Reserve’s MPC has stated that it anticipates that past policy rate adjustments will continue to have an impact on deposit and loan rates. The MPC underlined that its future monetary policy choices depend on passing-through the effects of such modifications to deposits and loans in the absence of additional shocks. The decisions also depend on how domestic prices are affected by decreases in commodity prices on a global scale.



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