Objective of Monetary Policy & Outlook

  • The mandate of BOJ’s monetary policy is the maintenance of price stability or low inflation. In this regard, monetary policy is geared towards achieving the medium term inflation target of 4.0 per cent to 6.0 per cent established by the Minister of Finance and the Public Service.

  • This level of inflation is consistent with a stable and competitive macro-economic environment, which is a prerequisite for sustained economic growth and employment.

  • The Bank’s assessment is that headline inflation for FY2018/19 should remain within the target of 4.0 per cent to 6.0 per cent, with the risks assessed to be balanced. Inflation is expected to track close to the lower bound of the target between June 2018 and December 2018, primarily reflecting a decline in food prices as a result of a recovery in agricultural supplies. Thereafter, headline inflation is expected to converge towards the centre of the target.

  • The BOJ’s macroeconomic outlook is comprehensively explained in the Quarterly Monetary Policy Report, covering the international economy, fiscal accounts, balance of payments, money, credit, interest rates, GDP and prices.

Also See: Setting the Inflation Target
Monetary Policy Decision Making
Monetary Policy Schedule

An operating target of policy, e.g. the monetary base and interest rates, is influenced directly by the Bank and can also be varied in order to bring about the desired impact on the policy objective.

An intermediate target of policy, e.g. the money supply or the exchange rate, has three main characteristics:

  1. It is not directly determined by the Bank of Jamaica
  2. It responds, however, to a stimulus that the Bank can vary, and
  3. It's behaviour is expected to be closely related to the ultimate target - Inflation

Money market trading between the Bank of Jamaica and authorized dealers, with the intention of influencing money and credit in the financial system. OMO involves outright sale or purchase of Government of Jamaica (GOJ) securities held by the Bank, and /or repurchase and reverse repurchase transactions.

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