The Bank of Jamaica (BOJ) unanimously raised its policy rate by 50 basis points to 6.0% effective September 29, 2026, seeking to limit second-round effects and prevent persistent inflation from becoming embedded in expectations amid elevated commodity and agricultural prices. Over the past year, BOJ held the rate at 5.75% through December 2025, cut it by 25 basis points to 5.50% in February 2026 and maintained that level through August. The rate applies to deposit-taking institutions’ current account balances at BOJ. Headline inflation rose to 7.9% in August, marking a third consecutive month above the 4.0%-6.0% target range, and is projected to increase further in the near term before returning to target by mid-2027. Demand conditions are improving during the post-Hurricane Melissa recovery, although fiscal-year 2026/27 growth remains vulnerable to agricultural, tourism-capacity and mining constraints, while the banking system remains sound, adequately capitalised and liquid. International reserves remain healthy, supporting adequate foreign exchange availability, and the exchange rate is expected to remain relatively stable. Escalating Middle East and Russia-Ukraine tensions have sustained high commodity prices, while global financial conditions have tightened faster than projected. BOJ said it would deploy additional tools if necessary to contain second-round inflation pressures and return inflation to target as quickly as possible.
Source: 2026-09-28Bank of Jamaica
Bank of Jamaica Raises Policy Rate by 50 Basis Points to 6.0%
The Bank of Jamaica (BOJ) unanimously raised its policy rate by 50 basis points to 6.0% from September 29, 2026, to limit second-round inflation effects amid elevated commodity and agricultural prices. Headline inflation reached 7.9% in August, above the 4.0%-6.0% target range for a third consecutive month, and is expected to return to target by mid-2027.