Bank of Jamaica Holds Policy Rate at 5.50% as Inflation Stays High

Kingston, Jamaica, 25 August 2026

The Bank of Jamaica has kept its benchmark policy rate unchanged at 5.50 per cent, choosing to hold steady as inflation runs above its target range and global energy prices remain volatile.

A unanimous decision

The central bank’s Monetary Policy Committee reached the decision unanimously after meeting on 14 and 17 August, with the outcome announced on 19 August. It also committed to continuing measures that keep the foreign exchange market relatively stable.

The committee said the inflation outlook was uncertain because of unresolved tensions in the Middle East and an escalation of the Russia-Ukraine war, both of which have kept international commodity prices, especially crude oil, high and unpredictable. A stable exchange rate, it noted, has helped to limit how much of those higher import prices feed through to Jamaican consumers.

Inflation above target

Headline inflation reached 7.5 per cent in July, up from 6.7 per cent in June and far above the 3.3 per cent recorded a year earlier. The Bank said the latest rise mainly reflected a second round of increases in route taxi and hackney carriage fares, together with higher electricity rates and service prices driven by costlier imported commodities. Core inflation, which strips out agricultural food and fuel, edged up to 5.2 per cent.

The Bank expects inflation to stay above the upper limit of its target during the September quarter before easing. It pointed to several pressures: imported inflation, stronger domestic demand linked to Government spending on post-Hurricane Melissa rebuilding, and higher farm prices amid drought and heat. It judged the risks to be tilted towards inflation turning out higher than forecast.

Growth and the next decision

Economic growth for the 2026/27 fiscal year is projected at between 1.0 and 3.0 per cent, with risks to the downside, particularly for tourism. International reserves were described as healthy. The next policy announcement is scheduled for 28 September.

What it means for borrowers and savers

For homeowners with variable-rate mortgages and buyers shopping for loans, an unchanged policy rate means no immediate relief on borrowing costs, and the Bank has said it is prepared to adjust its stance if the risks of higher inflation materialise. Rising prices for transport, electricity and food are also squeezing household budgets and the savings many families are building towards a deposit. Anyone planning a purchase or refinancing should budget cautiously and avoid assuming that rates will fall soon.

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