BOJ holds interest rate at 7%
Published:Tuesday | December 20, 2022 | 6:14 PM
Notwithstanding the latest inflation data showing consumer prices still on the ascent, Bank of Jamaica’s Monetary Policy Committee, MPC, held interest rate steady at 7.0 per cent in its latest decision issued on Tuesday.
The central bank noted that while November inflation had climbed to 10.3 per cent, it was within its forecast range of 9.5 per cent to 10.5 per cent. Additionally, BOJ said core inflation, which excludes food and fuel, had declined from 9.0 per cent in October to 8.8 per cent in November.
“The key external drivers of headline inflation, such as grains, fuel and shipping prices, continued to trend downwards and broadly in line with the bank’s projections,” BOJ said.
“In addition, as expected, the pace of monetary tightening by the United States Federal Reserve Board appeared to be slowing.”
Last week, the Fed and other central banks in the European Union and the United Kingdom continued to raise interest rates but at a more restrained half-point hike, instead of the three-quarter point adjustments that previously prevailed.
As for the Jamaican economy, BOJ says the September quarter is expected to record growth within a range of 3.5 per cent to 4.5 per cent, amid continued expansion of tourism activity, while the December quarter is forecast to expand at a slower pace within a range of 2.5 per cent to 3.5 per cent.
“However, against the background of the continued growth in the economy, labour shortages in selected sectors carry the potential for future wage adjustments, which can put upward pressure on inflation,” the central bank cautioned.