NewzKINGSTON, Jamaica — The Bank of Jamaica (BOJ) has increased its policy interest rate by 50 basis points to 6.0 per cent as it moves to contain rising inflation pressures and prevent higher prices from becoming entrenched in the economy. The decision was taken unanimously by the Monetary Policy Committee (MPC) during meetings held on September 24 and 25, 2026, and takes effect on September 29, 2026. The policy rate is the interest rate offered by the BOJ to deposit-taking institutions on their current account balances held at the central bank.
The committee said its decision in August to maintain the policy rate was appropriate based on the economic conditions and risks assessed at the time. However, the committee noted that recent global developments have worsened inflation pressures. These developments include escalating tensions in the Middle East, the ongoing Russia-Ukraine conflict, elevated commodity prices, tighter global financial conditions and increased domestic agricultural inflation linked to intensified El Niño conditions and reduced crop yields.
The BOJ said these factors are likely to keep inflation pressures elevated for longer than previously anticipated, making an increase in the policy rate necessary to limit second-round effects. The central bank said the move is intended to prevent temporary increases in prices from becoming embedded in inflation expectations, which could delay the return of inflation to the target range.
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