Dec 2009 Financial News

BOJ cuts interest rates on open market instruments

Dec 18, 2009

The Bank of Jamaica (BOJ) says the interest rates applicable to its open market instruments will be reduced by 200 basis points effective today.

"The benchmark six-month rate will therefore move from 17 per cent per annum to 15 per cent," the central bank said in a release yesterday.

"The positive trends in key economic indicators (inflation, the balance of payments and the exchange rate) are expected to be sustained over the medium term," the bank said. "This outlook is underscored in the economic programme agreed with the staff of the International Monetary Fund (IMF)."

According to the BOJ, the programme is underpinned by a package of policy measures geared towards fiscal and debt sustainability, which is expected to lay the foundation for a stable macroeconomic environment and sustained growth.

"While we anticipate a temporary shock to inflation over the next three months arising from fiscal measures, the longer term outlook still points to single-digit inflation," the bank said, adding that the increased access to concessionary external financing that the Stand-By Agreement with the IMF would facilitate (at least US$1.3 billion) will significantly enhance the ability of the BOJ to maintain market stability.


Source:
Jamaica Observer
Friday, December 18, 2009

http://www.jamaicaobserver.com/business/BOJ-cuts-interest-rates-on-open-market-instruments