Jun 2017 Financial News

BOJ transitions to overnight policy interest rate

Jun 28, 2017

Bank of Jamaica (BOJ) yesterday announced that, effective 01 July 2017, its policy rate will be the interest rate that it pays on overnight deposits held by deposit-taking institutions at Bank of Jamaica.

This rate is currently 3.75 per cent per annum.

The policy or signal rate is the designation given to the interest rate that signals BOJ's monetary policy stance.

As a result the interest rate that BOJ pays on its 30-day certificates of deposit will no longer be designated as the policy rate.

The BOJ will continue to offer 30-day certificates of deposit to primary dealers and DTIs but, effective 28 July 2017, they will be issued in fixed volumes by competitive multiple-price auctions.

The bank says it is making the change to strengthen the relationship between the policy rate and market interest rates which, in turn, influence the spending and saving decisions made by businesses and consumers.

By this means, the bank is able to influence the rate of inflation in pursuit of the inflation target.

Source:
Jamaica Observer
Wednesday June 28, 2017

http://www.jamaicaobserver.com/business-observer/boj-transitions-to-overnight-policy-interest-rate_103257?profile=1056