Bank of Jamaica policy rates cut to 8.5%
Published:Wednesday | August 4, 2010 | 12:00 AM
Effective August 4, the interest rate payable on Bank of Jamaica 30-day Certificates of Deposit will be reduced by 50 basis points to 8.5 per cent, the central bank announced Tuesday, a day after Prime Minister Bruce Golding said more rate cuts would happen.
"This revision to the Bank's policy rate reflects the benign outlook for inflation. A slower than expected expansion in money supply and bank credit during the first quarter of the fiscal year has kept core or underlying inflation stable in the local economy," said the BOJ.
"The recovery in global demand has also been sluggish and has contributed to relative stability in commodity prices. Thus, in the context of an exchange rate that has appreciated since the start of the fiscal year, the impulses to inflation from external sources have abated even further.
The central bank again said it expects that inflation will end the fiscal year at the lower end of the target range of 7.5 per cent to 9.5 per cent.
"The main risk to the forecast is the disruption to supply that a hurricane or other severe weather conditions may cause," it said.