JAMAICA | Bank of Jamaica Holds Interest Rate Steady, Commits to Economic Stability After Hurricane Melissa

Central bank deploys emergency measures to support recovery while protecting Jamaicans from prolonged inflation

The Bank of Jamaica is holding its benchmark interest rate at 5.75 percent and deploying special measures to stabilize the foreign exchange market as the country grapples with the economic fallout from Hurricane Melissa, Governor Richard Byles announced on November 24, 2025.

The hurricane caused extensive damage across Jamaica, particularly in western parishes, disrupting businesses, infrastructure, and livelihoods throughout the island. Governor Byles acknowledged that while inflation stood at just 2.9 percent in October—well below the central bank's 4 to 6 percent target—prices are expected to rise in coming months.

"With the devastation in the major food-producing parishes, inflation will inevitably rise, in the short term," Byles said in his statement. He pointed to agricultural shortages, recovery spending by households and government, and potential increases in remittances as factors likely to push prices higher.

Protecting Vulnerable Jamaicans

The Monetary Policy Committee, which met November 20-21, voted unanimously to maintain the current policy rate despite calls from some sectors for a different approach. Governor Byles emphasized that the decision reflects the central bank's commitment to protecting those hardest hit by both the hurricane and potential inflation.

"We recognise that the hurricane has disproportionately affected the poor and other vulnerable Jamaicans," he said. "A prolonged period of high inflation after the hurricane would again have the most negative impact on the same vulnerable groups."

The central bank projects that its current approach will return inflation to the target range by early 2027.

Foreign Exchange Market Support

To prevent currency instability from fueling higher prices, the Bank of Jamaica has implemented several emergency measures. Since the hurricane, the central bank has sold US$210 million into the foreign exchange market and will directly supply foreign currency to energy sector entities to prevent large purchases from distorting market prices.

The bank is also reintroducing scheduled advance notices of intervention sales to ensure adequate foreign currency liquidity during the recovery period.

Banking Services Slowly Returning

Commercial banking access remains a significant challenge for many Jamaicans. Branch recovery levels vary dramatically across the island—from just 25 percent in Trelawny and 33 percent in Westmoreland to full restoration in Clarendon and St. Andrew.

ATM availability shows similar patterns, with Hanover at 31 percent, Trelawny at 38 percent, and St. Elizabeth at 42 percent, while Kingston has achieved 100 percent recovery.

To address cash shortages, the Bank of Jamaica has facilitated emergency currency orders from commercial banks totaling J$3.9 billion, waiving all penalties for these orders through December 31, 2025.

Transaction Fees Waived

In a move to support electronic transactions and relief efforts, the central bank has waived fees for all customer payment transactions from November 3 through year-end. More than 240,000 transactions have benefited from this waiver in November alone.

"Bank of Jamaica continues to provide service of the highest standard to the nation at this critical time," Governor Byles concluded, "and is committed to playing a pivotal role in the sustainable recovery of our country and our people."

Jamaicans can check the BOJ website and social media platforms for updates on banking service recovery across the island.

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