Bank of Jamaica reduces benchmark interest rate
Inflation has hit its lowest point in 48 years at four per cent, and now the Bank of Jamaica has cut its policy rate by 25 basis points, saying it expects consumer prices to remain low over the next year.
BOJ has reduced the benchmark rate on the 30-day Certificate of Deposit from 5.75 per cent to 5.5 per cent, effective April 17.
“The recently announced inflation rate of4.0 per cent for FY 2014/15 is the lowest in 48 years. The sharper than expected decline in inflation for the fiscal year was due in part to the fall in oil prices but also to the moderation in price increases that has resulted from fiscal consolidation and economic reforms,” the central bank said in a statement issued late Thursday. “The impact of these changes will help to moderate inflation impulses over the medium term.”
Statistical Institute of Jamaica recorded four months of deflation from November 2014 to February 2015. In March, the rate was 0.5 per cent, but annual headline inflation declined to 4.0 per cent, compared to the annual rate of 4.5 per cent in February.