FX.co ★ Jamaica Raises Policy Rate to 6%

At its September 2026 meeting, Jamaica’s central bank raised its policy rate by 50 basis points to 6.0%, responding to persistent inflationary pressures, higher commodity prices, and elevated geopolitical risks that are clouding the economic outlook. The bank emphasized that inflation risks remain tilted to the upside. Headline inflation rose to 7.9% in August from 7.5% in July, staying above the target range for a third straight month, while core inflation was unchanged at 5.2%. Policymakers expect inflation to increase further in the near term before gradually returning to the target range by mid-2027. Drought conditions and a strengthening El Niño are projected to keep agricultural prices high, and rising global commodity prices are feeding through to higher fuel, energy, and transport costs. In addition, post-disaster recovery spending following Hurricane Melissa could further add to price pressures. Businesses’ 12‑month inflation expectations climbed to 7.3% in July from 6.7% in June.