Bank of Jamaica Holds Key Interest Rate at 5.50%

2026-08-19 21:54 By Isabela Couto 1 min. read

Jamaica’s central bank kept its policy rate unchanged at 5.50% at its August 2026 meeting, as persistent inflationary pressures and geopolitical risks clouded the outlook.

Headline inflation rose to 7.5% in July from 6.7% in June, remaining above the Bank of Jamaica’s target range, while core inflation increased to 5.2% from 5.0%.

The BOJ expects inflation to remain above the target range in the September quarter before moderating.

Tensions in the Middle East and the intensification of the Russia-Ukraine war are expected to keep fuel prices elevated, raising electricity, transport and other costs.

Additional pressures could come from fiscal spending on post-Hurricane Melissa reconstruction and worsening drought conditions.

Still, a stable exchange rate and healthy international reserves should help contain imported inflation.

The BOJ said inflation risks remain skewed to the upside and it is prepared to adjust policy if needed.

GDP growth for FY2026/27 is projected at 1%-3%.



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Bank of Jamaica Holds Key Interest Rate at 5.50%
Jamaica’s central bank kept its policy rate unchanged at 5.50% at its August 2026 meeting, as persistent inflationary pressures and geopolitical risks clouded the outlook. Headline inflation rose to 7.5% in July from 6.7% in June, remaining above the Bank of Jamaica’s target range, while core inflation increased to 5.2% from 5.0%. The BOJ expects inflation to remain above the target range in the September quarter before moderating. Tensions in the Middle East and the intensification of the Russia-Ukraine war are expected to keep fuel prices elevated, raising electricity, transport and other costs. Additional pressures could come from fiscal spending on post-Hurricane Melissa reconstruction and worsening drought conditions. Still, a stable exchange rate and healthy international reserves should help contain imported inflation. The BOJ said inflation risks remain skewed to the upside and it is prepared to adjust policy if needed. GDP growth for FY2026/27 is projected at 1%-3%.
2026-08-19
Bank of Jamaica Keeps Key Interest Rate Unchanged
The central bank of Jamaica kept its policy rate unchanged at 5.50% at its June 2026 meeting, noting that although inflation has remained within its target range over the past three months, the outlook remains uncertain. The central bank said inflation risks from geopolitical tensions have eased but remain elevated, with headline inflation expected to temporarily exceed the upper limit of the target range. It added that keeping policy unchanged is appropriate to contain second-round effects from higher international commodity prices. Headline and core inflation both accelerated, with the former exceeding the Bank's latest projection. While talks to end the Middle East conflict continue, uncertainty remains high. The BoJ also noted that international commodity prices remain elevated and volatile, US financial conditions have tightened, and domestic demand is recovering, though growth risks remain tilted to the downside.
2026-06-29
Bank of Jamaica Holds Base Interest Rate in May
The Bank of Jamaica maintained its policy rate at 5.50% during its May meeting as the inflation outlook remained highly uncertain amid escalating tensions in the Middle East and rising international commodity prices, particularly crude oil. The central bank noted that higher fuel and transport costs are expected to push headline inflation above the 4–6% target range during the June and September 2026 quarters from 4.3% in April. While inflation is expected to gradually moderate as geopolitical tensions ease and global oil supplies normalize, risks remain tilted to the upside due to the possibility of a prolonged conflict, adverse weather conditions, stronger inflation expectations, and higher domestic spending linked to Hurricane Melissa recovery efforts. Meanwhile, economic growth for fiscal year 2026/27 is projected within a 1.0% to 3.0% range, although risks remain skewed to the downside due to the potential impact of the conflict on tourism and domestic activity.
2026-05-20