WHEN Richard Byles leaves the Bank of Jamaica (BOJ) on August 18, the institution will hold 80 per cent more gross international reserves than it did at the end of 2019; operate with independence written into law; and oversee commercial banks that survived a pandemic, an inflation shock, and hurricanes without failure.

Yet one of its most important signals still loses force before reaching Jamaicans.

BOJ raised its policy interest rate from 0.50 per cent to 7.00 per cent to fight inflation, then cut it to 5.50 per cent as pressures eased. But deposit rates fell while lending rates barely moved. Savers felt the change more readily than borrowers.

That fault line — between a stronger central bank and the limited reach of its power — defines Byles’s seven years. Jamaica has larger reserves, an orderly foreign exchange market and sound banks. It also has a digital currency with limited adoption, an inefficient monetary transmission mechanism and a regulatory overhaul still years from completion.

Was his tenure successful stabilisation or unfinished reform?

“I think both, to be honest. I think both,” Byles told the Jamaica Observer in an exit interview on July 15, 2026. “We have done a lot, but there are still some major outstanding issues.”

Byles arrived on August 19, 2019 after a career spanning PanJam, Sagicor and the Economic Programme Oversight Committee (EPOC). Within a year, COVID-19 turned the job into crisis management. Inflation, wars and hurricanes followed.

Independence tested

The most consequential change of the Byles years was the remaking of BOJ itself. The Bank of Jamaica (Amendment) Act took effect in April 2021, giving the central bank operational independence and making price stability its principal objective. A statutory committee assumed responsibility for rate decisions, while the law restricted ministerial direction of monetary policy, foreign exchange operations, reserve management, and banking supervision.

The reform was a Government initiative, not Byles’s alone, but he became the first governor required to make it work. Its first serious test came almost immediately.

When inflation surged, BOJ began tightening in October 2021 and took the policy rate from 0.50 per cent to 7.00 per cent by November 2022 — 650 basis points in 13 months as annual inflation peaked at 11.8 per cent in April 2022.

“We know that that is hurtful to businesses and institutions and borrowers,” Byles told Sunday Finance. “We know that it is restraining on economic growth, so that was a very difficult decision to make.”

He said neither former Finance Minister Dr Nigel Clarke nor current Finance Minister Fayval Williams attempted to interfere with BOJ’s core functions. The bank, he said, had “a free hand”.

Byles told Parliament in June that annual inflation averaged six per cent between September 2019 and April 2026, or five per cent if the global supply chain shock from April 2021 to March 2023 is excluded.

The average does not mean inflation stayed within the Government’s four-to-six-per-cent target all the time. It moved from 11.8 per cent in April 2022 to 1.2 per cent in August 2025, then back to 6.7 per cent in June 2026 — volatility the average conceals.

BOJ had warned that commodity prices and post-hurricane reconstruction would temporarily push inflation above target. Even so, Byles’s successor inherits a live inflation problem. The next rate decision is due on August 19, the day after his term ends. The next inflation update will be published Monday, August 17, 2026, by the Statistical Institute of Jamaica.

A buffer — and a blind spot

If independence was the largest institutional change, foreign exchange may be the improvement Jamaicans noticed most.

Byles recalls his predecessor, Brian Wynter, warning him: “No matter what you do, Jamaicans will always judge you by the foreign exchange market.”

Gross international reserves rose from US$3.6 billion at the end of 2019 to US$6.64 billion in July 2026. Over Byles’s tenure the Jamaican dollar depreciated by an average 2.9 per cent a year, according to BOJ.

The reserves are a powerful national buffer, but not a pure scorecard of central bank trading. Government borrowing, the securitisation of future airport earnings and disaster financing also supplied inflows alongside BOJ’s market purchases.

The structural change was BOJ’s approach: It did not defend a predetermined exchange rate, but intervened against disorderly trading and accumulated reserves when conditions allowed. Byles believes that confidence that foreign currency will be available has reduced the incentive to hoard US dollars.

The commercial banks also remained sound. At the end of 2025, deposit-taking institutions held $3.06 trillion in assets. Capital adequacy was 14.8 per cent against a 10 per cent regulatory minimum; liquidity was almost twice the required level; and non-performing loans were 2.8 per cent of total loans.

“No failures, no runs on banks,” Byles said.

But safe banks do not automatically produce an efficient market. BOJ’s Financial Policy Committee reported this year that deposit rates declined as policy eased while lending rates remained broadly unchanged, citing structural rigidities in credit pricing.

The next governor will inherit a stronger institution, much larger reserves, well-capitalised banks, and a relatively orderly foreign exchange market. That is a substantial legacy after a pandemic, global inflation, geopolitical shocks, and severe weather.

Fixed-rate loans cannot reprice immediately, but BOJ officials also identify weak competition as an obstacle. Byles believes a concentrated market impedes transmission.

The problem predates his tenure. An International Monetary Fund study found that a one-percentage-point policy rate cut produced only a 0.15-percentage-point reduction in Jamaican bank lending rates after three months. Its older data do not measure today’s pass-through, but show how persistent the weakness has been.

For an independent central bank charged with controlling inflation through interest rates, this is not abstract. If the signal fades inside the banking system, BOJ may have to move rates further or hold them higher for longer to influence spending — imposing costs without achieving the full intended effect.

Byles calls better transmission “the fundamental to-do” for the next governor. BOJ is pursuing electronic-know your customer (e-KYC) technology and account portability to make switching banks easier and sharpen competition, but their effect has yet to be demonstrated.

Innovation without adoption

The same distance between architecture and execution runs through BOJ’s modernisation programme.

The central bank replaced Jamaica’s cotton banknotes with polymer notes. It also made Jamaica one of the early countries to issue a central bank digital currency, but JAM-DEX has not achieved everyday utility at scale.

At end-2025 there were 305,026 registered subscribers and 4,953 merchants enrolled through Lynk. But BOJ reported only 2,379 merchants accepting JAM-DEX, and no public figure shows how many subscribers transact regularly.

By July, BOJ had issued $294.68 million in JAM-DEX against total currency issue of $311.34 billion. That comparison does not measure transactions, but it establishes scale: the digital issue was 0.09 per cent of the central bank’s total currency issue.

Byles says banks should have been engaged earlier and digital payments treated from the start as a whole-of-government project.

“I haven’t completed JAM-DEX,” he said. “For that, I am really sorry, because I think it’s a good product. I think Jamaica needs it.”

Twin Peaks is the larger unfinished undertaking. Initiated by the Government after the 2023 Stocks and Securities Limited crisis, it would place prudential supervision of financial institutions with BOJ while the Financial Services Commission concentrates on market conduct and consumer protection.

Announced in January 2023 with an indicative 18-to-24-month timetable, the transition is only approaching Cabinet three and a half years later. Joint examinations and supervisory work have begun, but laws must still be drafted or amended and debated. Byles says full implementation will take years even after Cabinet approval.

The delay matters because Twin Peaks is more than an administrative reshuffle. The State must redraw regulatory boundaries, reorganise institutions and transfer responsibility without creating gaps through which risk or misconduct can escape.

Byles describes it as the largest policy reform he will leave unfinished. He is equally clear that BOJ’s achievements belong to the institution, not one governor.

“We have a wonderful staff here at the Bank of Jamaica,” he said, describing them as “second to none”.

The measure of seven years

The next governor will inherit a stronger institution, much larger reserves, well-capitalised banks and a relatively orderly foreign exchange market. That is a substantial legacy after a pandemic, global inflation, geopolitical shocks and severe weather.

The inheritance is nevertheless unfinished. Inflation is above target. Interest rate transmission remains weak. JAM-DEX lacks proven everyday use at scale. Twin Peaks will demand years of legislation and institution-building.

Byles strengthened BOJ’s defences and authority. The next test is whether that strength can travel further: from a rate decision to a customer’s loan statement, from a digital wallet to the checkout counter, and from a regulatory concept to enforceable law.

Byles never considered another extension. “No. No,” he said laughing. After 26 years leading private-sector financial institutions and seven at BOJ, he calls the governorship “the icing on the cake”.

“Whether it’s at Bank of Jamaica as governor or EPOC as co-chair, giving to the country, giving to Jamaica, has been my singular joy in life,” he told Sunday Finance.

He is ready to retire. The central bank he leaves is stronger than the one he inherited, but the final judgement on his tenure will rest partly on what happens next. If his successor makes BOJ’s decisions reach households and businesses, turns JAM-DEX into useful payment infrastructure and carries Twin Peaks into law, Byles’s seven years will look like the foundation of a more effective financial system.

If those reforms stall, the stronger institution may remain more powerful on paper than in people’s lives.