Subdued Inflation Will Prompt Bank of Jamaica To Hold Rates Steady

• Fitch Solutions expects the Bank of Jamaica (BOJ) will maintain its record-low interest rate of 0.50% through 2019 in an effort to boost below-target inflation.
• The bank will enact two 25 basis point (bps) hikes in H220 as inflation gradually rises, bringing the rate to 1.00%.
• This is a revision of our previous forecast for the BOJ to cut rates to 1.00% in 2019 and hike to 2.00% by end-2020.
• Fitch has downwardly revised its 2019 and 2020 average inflation forecast from 3.7% y-o-y to 3.6% and 5.3% to 4.8%, respectively, due to weak commodity prices and sluggish economic activity.

 (Source: Fitch)