KINGSTON, Jamaica — In a significant monetary policy shift, the Bank of Jamaica (BOJ) has implemented a 25 basis point reduction in its benchmark interest rate, lowering the overnight placement rate for deposit-taking institutions to 5.5 percent annually. The unanimous decision by the Monetary Policy Committee (MPC) marks a strategic adjustment following months of consistently controlled inflation metrics.
Governor Richard Byles announced the policy modification during Tuesday’s Quarterly Monetary Policy Report presentation at the BOJ headquarters, characterizing the move as a ‘cautious adjustment’ grounded in comprehensive analysis of recent economic indicators. ‘This decision followed a detailed assessment of the most recent inflation out-turn and the near-term outlook for prices,’ Byles explained, emphasizing the central bank’s evidence-based approach to policy formulation.
The inflationary landscape has demonstrated remarkable stability, with January 2026 headline inflation recorded at 3.9 percent—a decline from December 2025’s 4.5 percent and notably below the bank’s projections. This measurement places inflation just under the lower threshold of the BOJ’s target range of 4-6 percent. Governor Byles attributed this favorable trend primarily to reduced food prices resulting from agricultural recovery after Hurricane Melissa’s impact in October 2025.
Core inflation, which excludes volatile food and energy components, similarly decreased to 3.9 percent in January from 4.2 percent the previous month. This development extends Jamaica’s inflation containment streak to 17 consecutive months within or below target levels since August 2024.
The central bank’s strategic foreign exchange interventions have further supported price stability. Between November 2025 and January 2026, the BOJ injected approximately US$365 million into the market through its B-FXITT platform, with an additional US$87 million directed to state-owned refinery Petrojam. Despite these substantial sales, the bank achieved net purchases of approximately US$152 million during the three-month period following Hurricane Melissa.
Cumulatively, the BOJ sold US$1.1 billion via its foreign exchange facility in the twelve months ending January 2026, matching the previous year’s intervention scale. Governor Byles affirmed the institution’s commitment to maintaining ‘relative stability in the foreign exchange market’ through proactive measures, noting that exchange rate appreciation since November 2025 reflects strengthened remittance flows and strategic use of Jamaica’s robust foreign reserves.