In a historic meeting of the Standing Finance Committee of Parliament, Bank of Jamaica Governor, Richard Byles and a team from the central bank fielded questions on inflation and the monetary policy report for July to September 2021.
Members tackled the Bank on policy changes over the period which saw inflation jumping to 8.5 percent breaching its 4 to 6 percent initial target. Despite a generally good macroeconomic outlook, the BOJ Governor says a fourth COVID-19wave could hamper financial recovery.
With international oil prices and shipping costs pushing up global inflation, the BOJ has moved its policy rate from point 5 to 2 percentage points in recent months. One of a suite of changes to bring inflation under control locally as expectations rise. The governor gave the latest projections and warnings in his opening remarks to the committee, Tuesday.
However, the BOJ team notes the expectations of 300 local businesses surveyed several times each year have played a critical role in the climbing inflation rate. They expect some return to normality in inflation targeting by September 2022.
But despite criticism, the Bank is not alone in shifting inflation this year, however Senior Deputy Governor Dr. Wayne Robinson says it’s prudent the bank acts now.
