EFFECTIVE today, the interest rate payable on Bank of Jamaica (BOJ) 30-day certificates of deposit will be reduced by 50 basis points to 8.50 per cent.

Yesterday, the BOJ issued a press statement stating that the “revision to the bank’s policy rate reflects the benign outlook for inflation”.

“A slower-than-expected expansion in money supply and bank credit during the first quarter of the fiscal year has kept core or underlying inflation stable in the local economy,” said the statement. “The recovery in global demand has also been sluggish and has contributed to relative stability in commodity prices. Thus, in the context of an exchange rate that has appreciated since the start of the fiscal year, the impulses to inflation from external sources have abated even further.”

The central bank says it expects inflation will end the fiscal year at the lower end of the target range of 7.5-9.5 per cent.

“The main risk to the forecast is the disruption to supply that a hurricane or other severe weather conditions may cause,” the BOJ added.