BOJ Announces Further Reduction in Cash Reserve Requirement
- The Bank of Jamaica (BOJ) announced today that there will be a further reduction in the cash reserve requirement (CRR) by two percentage points to 7%, to take effect on June 3, 2019.
- This is the second reduction in the cash reserve requirement by the Central Bank this year as it continues to relax monetary policy.
- The cash reserve requirement is the amount of money that deposit-taking institutions are required to hold at the BOJ against prescribed liabilities.
- The Central Bank expects that the reduction in the CRR will serve to increase liquidity in the financial system by $12.3Bn and therefore support the expansion of credit to businesses and households at lower rates and potentially on better terms.
- The BOJ has left open the possibility for further reductions based on the results of its assessment of market conditions going forward.