The central bank of Jamaica kept its key policy interest rate steady at 0.50 percent on September 30th 2019, after cutting borrowing costs by 25 bps in the previous meeting to leave the key rate at its lowest level on record. Policymakers said that the decision was based on the bank’s assessment that monetary conditions are appropriate to support the achievement of the inflation target of 4.0 percent to 6.0 percent over the next 4 to 8 quarters. The Committee noted that the annual inflation rate fell to 4.1% in August from 4.3 percent in July and it is projected to slow to 3.7% at September before accelerating towards the middle of the target in the December 2019 quarter, given expectations for higher food prices in the context of hot, dry weather conditions. The Committee added that will continue to monitor the impact of monetary loosening on credit expansion, investment and economic growth; and will be ready to implement additional measures to meet the inflation target if necessary. Interest Rate in Jamaica averaged 11.78 percent from 1996 until 2019, reaching an all time high of 33 percent in October of 1996 and a record low of 0.50 percent in August of 2019.
Interest Rate in Jamaica is expected to be 0.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Jamaica to stand at 0.75 in 12 months time. In the long-term, the Jamaica Interest Rate is projected to trend around 1.50 percent in 2020, according to our econometric models.