Mon | Dec 16, 2019

BOJ reports increase in credit given by deposit-taking institutions

Published:Friday | November 22, 2019 | 10:25 AM
Bank of Jamaica (BOJ) Governor, Richard Byles, addresses journalists at the bank's quarterly briefing in downtown Kingston on Thursday, November 21, 2019 - Contributed photo

The Bank of Jamaica (BOJ) is reporting a 15.5 per cent increase in credit extended by deposit-taking institutions to businesses and households for the 12-month period ending September 2019.

Governor, Richard Byles, says this is “broadly consistent” with the level of growth in this area, since the start of the year.

He was speaking at the Central Bank’s quarterly briefing in downtown Kingston, on Thursday

“In addition to loans from DTIs, firms have been obtaining financing from the issue of corporate bonds and equity,” he added.

Byles said the continued buoyant growth in credit results from institutions such as commercial banks, merchant banks and building societies, reducing lending rates on local currency loans.

This, he added, is consequent on reductions in the BOJ’s policy rate on overnight deposit-taking institutions placements, which have fallen from 3.75 per cent to 0.5 per cent per annum, since June 2017.

Meanwhile, Deputy Governor, Dr Wayne Robinson, noted that underlying the overall 15.5 per cent increase in credit is a “healthy” 17 per cent growth in loans to the productive sector, year on year.

“We are seeing growth… right across a number of sectors [including] manufacturing, construction, distribution [and] professional services… so it’s quite broad-based,” he added.

On Tuesday, the BOJ announced its decision to maintain the overnight policy rate unchanged at 0.5 per cent, effective November 20.

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