Bank of Jamaica cuts the overnight rate to 5.5 percent from 5.75 percent effective tomorrow, the reduction is the second cut in just under a year. The rate was last cut on 21 May last year, by 25 basis points from 6 percent to 5.75 percent.
Bank of Jamaica announced that, effective 24 February 2026, the rate offered on overnight balances on the current accounts of deposit-taking institutions, the policy rate, will be reduced by 25 basis points from 5.75 percent per annum to 5.50 per cent per annum.
In a release by the central bank they stated “in the context of the improved inflation outturn and outlook, the Committee decided unanimously to: (i) reduce the policy rate (the rate offered to deposit-taking institutions (DTIs) on their current account balances at BOJ) by 25 basis points to 5.50 percent per annum, effective 24 February 2026; and (ii) remain proactive in preserving relative stability in the foreign exchange market.”
The inflation forecast takes into account an improved outlook for key domestic macroeconomic indicators. After possible temporary breaches of the upper limit of the inflation target over the June and September 2026 quarters, inflation is now projected to return to the 4 to 6 percent target range by the end of the December 2026 quarter. 
This earlier-than-previously-anticipated return to target reflects a moderation of the Bank’s forecast for later (or second-round) price increases. In addition, private sector expectations of future inflation (inflation expectations), a key driver of headline inflation, are forecast to fall to normal levels over the near term. The current account of Jamaica’s balance of payments is, however, projected to record higher deficits over the near term as the economy rebuilds from the Hurricane Melissa fallout, but the international reserves remain healthy and are projected to improve further. The forecast also considers the direct impact of the recently announced tax package.