FX.co ★ Jamaica Holds Policy Rate at 5.5%

The Bank of Jamaica left its policy interest rate unchanged at 5.50% at its March meeting, as the inflation outlook has become highly uncertain due to the ongoing conflict in the Middle East. The central bank noted that although annual inflation stood at 3.9% in February, sharp increases in international commodity prices and shipping costs are projected to push both headline and core inflation above the 4.0–6.0% target range in 2026. While the scale of these effects remains unclear, higher energy and transport costs, together with recent government tax measures, represent significant upside risks to the inflation forecast. At the same time, post-hurricane reconstruction and fiscal spending continue to influence domestic prices. Nevertheless, Jamaica’s international reserves remain at elevated levels, providing a substantial buffer to support market stability. Economic growth is expected to remain within the 1.0–3.0% range for the 2026/27 fiscal year, despite downside risks to the tourism sector.