Bank of Jamaica
By Javaughn Keyes
The Bank of Jamaica's Monetary Policy Committee has again lowered the policy interest rate.
The committee met last week, and decided to lower the rate offered on overnight balances in the current accounts of deposit taking institutions by 25 basis points.
Effective Tuesday October 1, the policy interest rate will stand at 6.5 per cent per annum.
The rate was adjusted downward in August for the first time since 2019, and signaled the end of Covid-19 pandemic linked rate hikes, forced by higher inflation.
The move comes after the US Federal Reserve also lower its benchmark rate.
The MPC says the decision to loosen monetary policy further is based on an improvement in the inflation outlook.
Annual headline inflation at August 2024 was 6.5 per cent, in line with the most recent forecast and above the Bank's target range of 4 to 6 per cent.
It says however that the measure of core inflation that excludes the prices of agricultural food products and fuel was 4.3 per cent, continuing the lowering of underlying inflation since the start of 2024.
It says the projected path for inflation over the next eight quarters is likely to be revised downward.
The MPC's report notes that this outlook largely reflects the possibility, of a lower-than-anticipated impact of Hurricane Beryl on agricultural supplies.
The decision means Jamaicans could overtime start seeing a cut in interest rates on loans and other instruments over the next year.
The date of the next policy interest rate decision announcement, is November 21.
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