The Bank of Jamaica (BOJ) has decided to maintain its key interest rate at 5.75%, defying market expectations for a rate cut. This decision, announced by Governor Richard Byles, reflects the central bank’s focus on medium-term inflation risks and robust domestic demand, despite recent low inflation figures. The Monetary Policy Committee (MPC) unanimously agreed to hold the rate, emphasizing the importance of core inflation, which remains at 4.2%, within the target range. This core figure, which excludes volatile food and fuel prices, indicates persistent underlying price pressures, particularly in the services sector. The BOJ attributes the low headline inflation of 1.2% to temporary factors such as increased agricultural production post-Hurricane Beryl and reduced public transport fare impacts. The bank’s hawkish stance aims to manage domestic demand and anchor inflation expectations, supported by a tight labor market and elevated wage growth. The economy is projected to grow between 1% and 3% in fiscal year 2025/26, driven by expansions in Agriculture, Mining, and Tourism. External risks, including potential U.S. tariff increases and geopolitical tensions, also informed the BOJ’s cautious approach. The next policy decision is scheduled for November 20, 2025, allowing time for reassessment of economic data.