This comes in the wake of data from the Statistical Institute of Jamaica (STATIN), which show the out-turn falling from 5.2 per cent in December 2017 to 4.8 per cent in January.
“The trajectory reflects the rise and then the fall in agricultural food prices as the impact of flood rains in the year started to dissipate and agricultural supplies improved. Over the course of the year, the Bank expects inflation to continue to track around the lower half of the four to six per cent target before rising to around five per cent,” the Governor said.
Wynter said the projection took into consideration factors such as adverse weather “that is beyond anybody's control”.
He was speaking at the BOJ's quarterly media briefing at the Bank's auditorium in downtown Kingston today.
Noting that the Jamaican economy's recovery has been “sluggish”, Wynter said the BOJ anticipates that growth will “remain below the economy's capacity in the near term”.
As such, he said the BOJ is of the view that this, along with continued fiscal consolidation and low-inflation expectations anchored around the Bank's target, “calls for a more accommodative monetary policy stance”.
Against this background, Wynter highlighted the BOJ's first monetary policy decision under the new schedule, lowering of the policy rate by 25 basis points to 2.75 per cent, which was announced on Tuesday. The policy rate is the interest rate paid by the Bank on overnight deposits.
The governor explained that this adjustment reflects the BOJ's assessment that inflation for the next eight quarters will remain within the target of four to six per cent, with the risks “slightly skewed to the downside”.
Tuesday's announcement is the first of eight monetary policy decisions that Wynter said the BOJ has scheduled for 2018 and is committed to making public.
“This commitment is an important part of the bank's plan to improve the transparency of the monetary policy framework,” he added.
- Countries: Jamaica