Bank of Jamaica holds interest rate at 5.5% as inflation risks rise

Bank of Jamaica holds interest rate steady as inflation nears target ceiling

Bank of Jamaica (BOJ) has left its benchmark interest rate unchanged at 5.50 per cent on Monday, warning that inflation is on course to temporarily breach the upper limit of its target range as the lingering effects of higher global commodity prices continue to filter through the domestic economy.

5 hours ago

BOJ holds interest rate at 5.5%, warns prices may rise further

KINGSTON, Jamaica — The Bank of Jamaica (BOJ) has kept its key interest rate unchanged at 5.5 per cent, saying it is not yet ready to ease its stance because prices are expected to rise further in the short term. The decision means there is unlikely to be any immediate relief for borrowers hoping for lower interest rates on loans. The BOJ said inflation, which measures the rate at which prices are rising, reached 5.5 per cent in May 2026. That is still within the central bank’s target range of 4.0 to 6.0 per cent, but warned that inflation is expected to temporarily move above the top of that range in the near term. The decision was made unanimously by the BOJ’s Monetary Policy Committee, which met on June 25 and 26. According to the central bank, recent price increases have been driven mainly by higher prices for some agricultural items and the impact of higher international commodity prices on Jamaica. It said those imported costs are now beginning to affect prices more broadly across the economy. It said core inflation, which strips out some of the more volatile prices such as food and fuel, rose to 4.7 per cent in May, up from 3.9 per cent in January. This suggests that price pressure is no longer limited to a few items. The central bank also pointed to higher energy and transport-related costs, including the recent increase in public passenger fares, as factors likely to push inflation higher. Recovery spending following Hurricane Melissa could also add to demand in the economy and place further pressure on prices. At the same time, the BOJ said weaker consumer purchasing power could help to limit how far prices rise, as many households may not be able to spend as freely. The central bank said the foreign exchange market has remained relatively stable and Jamaica’s international reserves are healthy. The BOJ said it will continue to watch the economy closely and is prepared to adjust policy if inflation pressures become stronger than expected.    

5 hours ago