Bank of Jamaica Holds Its Rate at 5.5% as Oil Keeps Inflation on Watch

The Bank of Jamaica has kept its policy rate at 5.5 percent and signalled it is ready to move if price pressures persist. Headline inflation was 4.3 percent in April, inside the 4-to-6 percent target, but the central bank has warned it could breach 6 percent over the June and September quarters, driven mainly by higher fuel, electricity and transport costs tied to the Middle East shock, on top of the lingering effects of Hurricane Melissa.

The recent easing of oil prices, as the regional ceasefire holds, is the development that could keep that breach short and shallow. For diaspora households, the near-term read is that prices at home may run hot through the summer before settling, and the exchange rate remains a key thing to watch when timing remittances or larger transfers.

Source: Bank of Jamaica; Jamaica Gleaner; Jamaica Observer.