The Bank of Jamaica (BOJ) is holding the policy interest rate (the rate offered on overnight placements with Bank of Jamaica) unchanged at 2.00 per cent.
A release from the BOJ says this decision reflects its assessment that inflation will approach the upper end of the 4.0 per cent to 6.0 per cent target by June 2019 and will trend thereafter to the middle of the target range.
Bank of Jamaica also judges that current monetary conditions are consistent with inflation returning to the centre of the target of 4.0 per cent to 6.0 per cent over the medium term. In the Bank’s short-term outlook, the key sources of upward price pressure include continued improvements in domestic demand and increases in utility rates. Sources of downward pressure include a slowdown in the pace of price increases for agricultural produce.
The Bank’s medium-term outlook for inflation of 5.0 per cent incorporates expectations for a gradual acceleration in economic activity (growth in real GDP), buoyed by further strengthening of the US economy and continued domestic monetary accommodation. The risks to the inflation forecast are assessed to be balanced.