THE Bank of Jamaica (BOJ) yesterday lowered the interest rate on 30-day certificates of deposit (CDs) by another 50 basis points (bps) to eight per cent, making it the fifth time the central bank has lowered rates since the start of 2010.

At the same time, the BOJ reduced the rate payable to financial institutions for overnight placements from 0.50 per cent to 0.25 per cent.

The central bank decided to lower the rate again due to a “more favourable outlook for domestic inflation for fiscal year 2010/11”.

“Furthermore, net international reserves now stand at US$1.9 billion, and are likely to outperform the benchmarks set under the current IMF Stand-By Arrangement,” added Wednesday’s release issued by the BOJ. “These resources constitute a strong buffer against financial or weather related shocks that might otherwise threaten the achievement of the macroeconomic targets.”

At the start of 2010, interest rate on 30-day CDs stood at 10.5 per cent.

Treasury bill rates fell again in August, with the 91-day average yield dropping on Wednesday from 8.32 per cent to 8.06 per cent and the 182-day yield falling from 8.73 per cent to 8.24 per cent.

Last week, the average yield on 28-day T-bills fell from 8.84 per cent ot 8.42 per cent.