Bank of Jamaica Keeps Policy Rate at 5.75% as Headline Inflation Dips to 1.2%

KINGSTON, Jamaica — The Bank of Jamaica (BOJ) has held its benchmark policy interest rate at 5.75 per cent a year, choosing to stand pat even as headline inflation fell well below its target range.

The decision, which applies to overnight placements with the central bank, was taken by the Monetary Policy Committee chaired by Governor Richard Byles at meetings held on September 25 and 26, according to a Jamaica Information Service report on the announcement.

Low inflation seen as temporary

Annual headline inflation stood at just 1.2 per cent in August 2025, far beneath the BOJ’s four to six per cent target. Core inflation, which strips out volatile agricultural food and fuel prices, was 4.2 per cent and has remained inside the target band since March.

The central bank attributed the unusually low headline figure to a handful of one-off supply factors. Agricultural supplies are much stronger than a year earlier, when Hurricane Beryl disrupted farming in July 2024. The reduction in General Consumption Tax on electricity announced in March 2025 has also lowered household costs, while the effect of earlier increases in transport fares has worked its way out of the annual comparison.

Because these influences are expected to fade, the BOJ projects that headline inflation will stay below target for the rest of 2025 before returning to the four to six per cent range by March 2026. With core inflation stable, the committee judged that the current policy setting remains appropriate.

What borrowers should expect

The hold means there is no fresh push from the central bank for commercial lenders to cut mortgage and loan rates in the near term. Homebuyers shopping for financing should not expect significant movement in bank mortgage pricing before the next policy review, though competition among lenders and the National Housing Trust’s concessionary rates still leave room to negotiate. For existing borrowers on variable-rate loans, the decision offers a period of predictability, while savers and investors can expect deposit and money-market yields to stay broadly where they are for now.

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