The Monetary Policy Committee of the Bank of Jamaica on 20 May 2026 left its policy rate unchanged at 5.50 % per annum, judging the existing stance adequate to curb prospective second-round effects from a sharp, conflict-driven surge in global oil prices that threatens to push headline inflation above the 4–6 % target in the June and September 2026 quarters before easing as geopolitical tensions subside. After trimming the rate by a cumulative 50 bp through two 25 bp cuts in May 2025 and February 2026, the central bank has since held steady. The MPC will maintain special foreign-exchange support—direct FX sales to energy importers and pre-announced market interventions—to anchor market stability. Annual headline inflation was 4.3 % in April but is projected to breach the target temporarily, with moderation expected once oil supply normalises, though domestic demand linked to Hurricane Melissa reconstruction may temper the decline; FY 2026/27 GDP growth is forecast at 1–3 %, with risks tilted lower given potential tourism and cost-pressure headwinds. While the conflict is set to widen the external deficit, ample reserves are deemed sufficient to cushion shocks and contain FX volatility. The Committee highlighted elevated global commodity prices stemming from Middle East hostilities as the key external driver and signalled readiness to tighten policy should a prolonged conflict generate sustained inflationary pressure, with its next announcement scheduled for 29 June 2026.
Bank of Jamaica2026-05-20
Bank of Jamaica holds policy rate at 5.50 % per annum
Bank of Jamaica’s Monetary Policy Committee kept the policy rate at 5.50 % on 20 May, judging it adequate to limit second-round inflation from conflict-driven oil shocks that could push headline inflation above the 4–6 % target in the June and September quarters. The Committee will maintain direct FX support to energy importers and pre-announced interventions, and signalled readiness to tighten if pressures persist ahead of its 29 June decision.