BOJ maintains policy rate at 5.75 per cent

The Bank of Jamaica (BOJ) has announced it is holding its policy rate at 5.75 per cent per annum.

It says during meetings on September 25 and 26, its Monetary Policy Committee (MPC) held deliberations on the Bank's stance in the context of continued low domestic inflation, global uncertainties and evolving interest rate trajectories in major developed countries.

Following these deliberations, the MPC determined that the current policy stance continues to be appropriate to support inflation converging to the target range.

It said the decision to maintain the policy rate is based on, among other things, the fact that while headline inflation of 1.2 per cent at August 2025 is below the Bank’s target range of 4.0 to 6.0 per cent, core inflation continues to track within the target range.

Moreover, it said the causes of the low headline inflation rate at August 2025 are temporary and unrelated to demand conditions.

Another factor outlined by the central bank for maintaining the rate is that the risks to the inflation outlook are skewed to the upside.

It said higher inflation could stem from a sharper-than-anticipated increase in tariffs faced by the United States’ trading partners as well as related second-round effects. This could result in higher imported inflation and inflation expectations. In addition, inflation could be higher than projected if there is further escalation in geopolitical tensions, which could negatively impact international supply chains. Lower inflation could, however, result from lower-than-projected international commodity prices as well as weaker demand conditions.

"Economic indicators continue to point to a stable macroeconomic environment. Further, with stable domestic interest rates, the decline in interest rates abroad has improved the differential between domestic and external rates, which should better support stability in the foreign exchange market. In addition, the current account of Jamaica’s balance of payments is projected to remain in surplus over the near term, and the international reserves are healthy and are projected to improve further," the Bank added.

It said the committee will continue to monitor the incoming data and adjust its policy accordingly. The date of the next policy decision announcement is November 20.

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