Inflation rate to hold steady – BOJ Governor
BOJ Governor Bank of Jamaica
The Bank of Jamaica (BOJ) says that inflation is set to hold to targeted rates of between four and six per cent over the next eight quarters.
Addressing the BOJ’s Quarterly Monetary Policy Briefing, BOJ Governor Richard Byles said “monetary conditions are generally appropriate to support the achievement of the Bank’s inflation target,” he said.
Byles added that the targets were set by the government “to set a faster pace of economic growth while at the same time supporting the government’s ongoing debt reduction strategy.”
Watch the video for more on what Byles had to say.
The BOJ governor also noted that deposit-taking institutions, including commercial and merchant banks, had reduced their lending rates (in local currency) in line with the BOJ’s own downward trend.
Since June 2017, the policy rate of the BOJ has come down from 3.7 per cent to the present rate of 0.5 per cent. This, he said, had resulted in buoyant growth in the loans sector, with credit issued to businesses and households growing by 15 per cent over the 12-month period between September 2018 and September 2019. “This is broadly consistent with the growth observed each month from the start of this year,” he noted.
Addressing consumer prices, Byles reported that the latest figures from the Statistical Institute (STATIN) showed that prices rose 3.3 per cent for the year ended October 2019, an improvement over the 4.7 per cent rise over the corresponding period the previous year.
Food and Non-Alcoholic Beverages was the largest single contributing category to Inflation for the period, rising by 5.9 per cent over the previous year.
“This was largely driven by an almost 17 per cent increase in vegetable prices,” Byles noted. Increases in school fees drove an overall 6.4 per cent increase in the Education category.
Contrary to those increases, the category Housing, Construction, Electricity and Utilities, fell by one per cent, reflecting a decrease in the cost of fuel used to generate electricity. The category Transport also registered a decline, 1.9 per cent, attributable to lower oil prices.
Byles summarized that an examination of these and other consumer prices confirmed previous observations by the central bank that domestic demand continues to run below the economy’s capacity, hence underlying inflation remains low.