FX.co ★ Jamaica Holds Policy Rate at 5.75%

The Monetary Policy Committee (MPC) of the Bank of Jamaica opted to maintain the policy rate at 5.75% during its November gatherings. This decision was driven by the immediate inflationary consequences of Hurricane Melissa and the imperative of sustaining macroeconomic stability. In October, headline inflation stood at 2.9%, with the MPC forecasting a significant surge that will surpass the 4–6% target range in the short term. Factors driving this anticipated rise include supply disruptions caused by the hurricane, which are expected to increase food and other prices. Additionally, core inflation is predicted to exceed the target range by mid-2026. Economic activity is projected to contract considerably in the near term due to substantial infrastructure damage and disruptions to productive activities and livelihoods, counteracting prior expectations of continued near-term growth. The MPC highlighted that the risks to inflation are skewed towards the upside. These risks encompass increased domestic demand related to reconstruction efforts, heightened inflation expectations, and the potential for long-term damage to specific sectors.