Bank of Jamaica Holds Policy Rate

• Bank of Jamaica (BOJ) announced its decision to hold the policy interest rate unchanged at 0.50% per annum on June 30, 2021. The policy rate is the interest rate that it offers to deposit-taking institutions on overnight placements with BOJ. 
• The decision to hold the policy rate unchanged was made by a unanimous vote by the Bank’s Monetary Policy Committee (MPC). This decision was based on the MPC’s assessment that, despite recent increases in international commodity prices, the existing stance of monetary policy remains appropriate to support inflation within the target range (4%-6%) over the next two years. The Bank’s accommodative monetary policy posture is also aimed at supporting a recovery in economic activity in Jamaica. 
• Based on the Bank’s forecast in May 2021, inflation is projected to average 4.8% over the next two years. The forecast anticipates that commodity price inflation will accelerate in the context of global supply chain disruptions and increasing demand as economies reopen, leading to higher domestic transport and processed food inflation.

(Source: BOJ)