• The capture of Venezuelan President Nicolás Maduro by U.S. military forces unleashed a serious diplomatic crisis in the Community of Latin American and Caribbean States (CELAC).
• What was intended to be an emergency session called by Colombia and Brazil to condemn foreign intervention instead exposed a sharply divided region, unable to reach a unified position on Washington’s military operation.
• At the centre of the split, the Dominican Republic aligned with a bloc of ten countries, led by Argentina, that blocked consensus on rejecting the U.S. action. The bloc – comprising Argentina, the Dominican Republic, Paraguay, Peru, Bolivia, Costa Rica, Ecuador, El Salvador, Panama, and Trinidad and Tobago – reportedly plans a joint statement that would validate Maduro’s arrest, citing allegations of transnational narcoterrorism, according to diplomatic sources and reports from Infobae.
• This position marks a turning point for Dominican foreign policy, signalling a departure from its traditionally cautious stance in multilateral forums. On the opposing side, a progressive bloc including Mexico, Brazil, Chile, Honduras, Cuba, and Nicaragua warned that the operation sets a dangerous precedent by violating national sovereignty.
• The divide even extends within countries, such as Chile, where outgoing President Gabriel Boric condemned the action while president-elect José Antonio Kast praised it. With Venezuela politically destabilised and CELAC unable to issue a joint response, the organisation’s silence has become a powerful symbol of Latin America’s growing fragmentation.

(Source: Dominican Today)

• Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday the central bank will continue to raise interest rates if economic and price developments move in line with its forecasts. Japan's economy sustained a moderate recovery last year despite the hit to corporate profits from higher U.S. tariffs, Ueda said in a speech delivered to the country's banking sector lobby.
• "Wages and prices are highly likely to rise together moderately," Ueda said, adding that adjusting the degree of monetary support will help the economy achieve sustained growth.
• The BOJ raised its policy rate to a 30-year high of 0.75% from 0.5% last month, taking another landmark step in ending decades of huge monetary support and near-zero borrowing costs.
• Despite the move, Japan's real borrowing costs remain deeply negative with consumer inflation exceeding the BOJ's 2% target for nearly four years. Markets are focusing on the BOJ's quarterly outlook report due at its policy meeting on January 22-23, for clues on how the board views the inflationary impact from recent yen falls.
• The yen's weakness has pushed up import costs and broader inflation, prompting some board members to call for further, steady rate hikes. The dollar rose 0.2% to ¥157.08 after reaching ¥157.255 for the first time since December 22.
• Market expectations of further BOJ rate hikes have pushed up yields, with those on the benchmark 10-year Japanese government bond (JGB) briefly hitting a 27-year high of 2.125% on Monday. Speaking before the same banking lobby, Finance Minister Satsuki Katayama said Japan was at a critical stage of shifting to a growth-driven economy, from one mired in deflation.

(Source: Reuters)

• The main risk to the U.S. economy from the Trump administration’s capture of Venezuela’s leader over the weekend would stem from rising oil prices, Minneapolis Federal Reserve President Neel Kashkari said, but that does not appear to be underway so far.
• The risk is “mostly through oil prices,” Kashkari said in an interview on CNBC. “When Russia invaded Ukraine, it sent a commodity shockwave all around the world. It didn’t happen with Hamas attacking Israel. It has not happened now with the U.S. and Venezuela. But that’s the mechanism that… would directly affect the US.” “I don’t see it so far,” he added.
• In the biggest intervention in Latin America since the 1989 invasion of Panama, U.S. Special Forces over the weekend captured Venezuela’s long-time leader, Nicolas Maduro, and brought him to New York to face drug trafficking charges.
• Commodity and financial asset markets so far have shown only a modest response to the surprise development. U.S. light sweet crude oil prices on Monday were about 1% higher but were not far above five-year lows touched in December.

(Sources: Reuters)

• The Statistical Institute of Jamaica (STATIN) reported that the Jamaican economy grew by 5.1% in the July to September quarter of this year, compared with the same period last year. This was the result of increases in the Goods Producing Industries of 10.9% and the Services Industries of 3.3%
• The economy’s performance reflected recovery from the negative impacts of Hurricane Beryl in July 2024, largely driven by increased activity in industries most affected, including Agriculture, Forestry & Fishing, Mining & Quarrying, Electricity, Water Supply & Waste Management and Accommodation & Food Service Activities.
• The recovery in the Agriculture, Forestry & Fishing industry was further aided by favourable weather conditions during the period and ongoing efforts from both government and private sector entities to boost production capacity. Furthermore, Growth was recorded for all the Goods-Producing industries, Agriculture, Forestry & Fishing (20.9%), Mining & Quarrying (4.0%), Manufacturing (8.4%) and Construction (5.5%).
• The 3.3% expansion in the Services Industries resulted from increases across all Services industries, except for Public Administration & Defence, which declined by 0.7%. Improved performances was recorded in Electricity, Water Supply & Waste Management (6.7%), Wholesale & Retail Trade; Repair of Motor Vehicles; Installation of Machinery & Equipment (3.1%), Accommodation & Food Service Activities (6.8%), Transport & Storage (7.1%), Information & Communication (1.5%), Financial & Insurance Activities (5.3%), Real Estate & Business Activities (1.0%) and Education, Health & Other Services (2.5%).
• Real value added (seasonally adjusted) increased by 1.1% in the third quarter of 2025 when compared with the second quarter of 2025, marking the third consecutive quarterly growth for 2025. This performance was attributed to a 2.1% increase in the Goods-Producing Industries and a 0.8% increase in the Services Industries.
• Looking ahead, the catastrophic impact of Category 5 Hurricane Melissa on October 28, 2025, has vastly shifted the outlook of the economy. The Planning Institute of Jamaica (PIOJ) has projected a severe economic contraction of 11.0% to 13.0% for the October–December 2025 quarter, marking the country's worst quarterly performance since the onset of the 2020 pandemic.
• This unprecedented shock, which caused physical damage estimated at US$8.8Bn (approximately 41% of 2024 GDP), has effectively wiped out the 5.1% growth achieved in the third quarter and is expected to result in a full fiscal year decline of 3.0% to 6.0%. With key sectors like Agriculture and Tourism facing massive infrastructure losses and a US Level-3 travel advisory further dampening visitor arrivals, the economy is not forecast to return to positive growth until the last quarter of 2026.

(Sources: STATIN, PIOJ & NCBCM Research)

• Supreme Ventures Ltd. (SVL) announced that initial discussions are underway with Dolla Financial Services Limited to divest its Evolve Loan Co’s loan portfolio and selected assets, including its digital lending solutions to the company.
• The planned transaction represents a deliberate capital management initiative aimed at optimising group balance sheet efficiency, reducing credit risk concentration and improving risk-adjusted returns, while maintaining exposure to future value creation in the loan portfolio.
• Following the divestment, Evolve will pivot toward an asset-light operating model with a strategic focus on loan origination, digital enablement, and fee-based income streams. This shift is expected to improve returns on capital while reducing balance sheet risk.
• The acquisition supports Dolla’s growth strategy by expanding scale and strengthening its lending platform. For Supreme Ventures, the transaction enhances capital flexibility while preserving participation in future value creation through its 15% equity ownership in Dolla Financial Services Limited.
• SVL’s stock price has declined by 30.1% throughout the 2025 calendar year, closing at $17.38 on December 31, 2025. At this price, the stock closed at a price-to-earnings (P/E) ratio of 23.4x, which is higher than the Main Market average of 13.4x.

(Sources: JSE & NCBCM Research)

• The Central Bank of Trinidad and Tobago (CBTT) has maintained its policy repo rate at 3.5%, citing well-contained inflation, improving liquidity conditions, and lingering weakness in the non-energy sector. In its Monetary Policy Committee announcement, the Bank said the decision was taken against a backdrop of modest global economic prospects and tentative domestic growth.
• 'Global economic prospects remain modest as persistent geopolitical tensions and trade policy uncertainty dampen economic activity,' the Committee noted. It also pointed to the International Monetary Fund's October 2025 World Economic Outlook, which projected world output growth of 3.2% in 2025, marginally lower than the 3.3% recorded in 2024.
• The Committee stated that while economic growth in the United States (U.S.) has shown resilience despite labour market challenges and above-target inflation, the Central Bank said other major economies continue to face softer growth alongside stubbornly elevated inflation. International energy prices, which the Bank described as a barometer of global economic conditions, have also softened in recent months.
• Globally, monetary policy has shifted towards easing, with central banks placing greater emphasis on supporting economic growth. The CBTT highlighted that several monetary authorities reduced policy rates between October and December 2025.
• In particular, the US Federal Reserve lowered its federal funds target range by 0.25% to 3.50–3.75% in December and announced the commencement of buy-backs of short-term government bonds amounting to US$40Bn per month to support market liquidity. As a result, short-term US treasury yields softened, while interest rates on T&T three-month treasuries firmed. This narrowed the negative T&T–U.S. interest rate differential on three-month treasuries to -74 basis points as of December 26, 2025, from -230 basis points in July 2025.
• That said, the Committee acknowledged rising uncertainty stemming from geopolitical tensions between the United States and neighbouring Venezuela, but noted that inflation remains low and liquidity conditions have improved. 'However, economic growth is somewhat tentative. The positive effect of higher energy production in the second quarter of 2025, driven by two new natural gas fields, may be partially offset by a non-energy sector that is losing momentum across several sub-sectors. This suggests that the domestic economy is still in need of support to engender a sustained recovery,' it stated.
• The report also highlighted the importance of safeguarding the country's foreign reserves, given T&T's high import dependence. Foreign reserves rose from US$4.6Bn in October 2025 to US$5.3Bn as of December 19, 2025, although the Bank cautioned that conventional indicators of reserve adequacy warrant close monitoring.

(Source: Trinidad Express Newspaper)

• Further expansion of the energy value chain in Guyana and Suriname is expected in 2026, as stakeholders fast-track actions to monetise hydrocarbon resources and balance the energy transition.
• Building on the seamless incorporation of new production phases, the fifth stage, Uaru, of Guyana's Stabroek flagship deepwater acreage is scheduled to come online with 250,000 barrels per day (b/d). Development drilling may also begin for Stabroek's seventh phase, Hammerhead.
• On the exploration front, seismic acquisition is on the radar, with planned shoots across shallow water lots 1, 2, 3 and 4, which include blocks awarded in Guyana's first offshore licensing round. There is also talk that a second offshore round will be launched in the new year.
• Meanwhile, the 300 mega-watt (MW) power plant that is part of Guyana's gas-to-energy project is pencilled in to enter service toward the end of 2026. The project includes a gas pipeline and a natural gas liquids component. Results are also due in the coming weeks and months for calls to build an ammonia and urea plant, to establish a Liquefied Petroleum Gas (LPG) bottling and logistics company, and to advance the 165MW Amaila Falls hydro project.
• For Suriname, a second final investment decision (FID) to tap its offshore resources could come in 2026 and would target natural gas at block 52, following the first FID for the GranMorgu oil project at block 58. In November, a declaration of commerciality was announced for block 52's Sloanea field.
• As in Guyana, gas is forecast to play an increasing role in Suriname's energy mix, particularly for power generation. Additionally, Suriname's government has pinned hopes on national oil company Staatsolie's open-door offering for offshore acreage, which covers five sectors totalling over 70,000km² in water depths ranging from five to 3,000m. Expectations are also high following the signing of production sharing contracts for offshore blocks 9 and 10.

(Source: Bnamericas)

• Labour market weakness, uncertainty about inflation and political pressure will push the Federal Reserve to lower interest rates aggressively in the early part of 2026, according to Mark Zandi, chief economist at Moody’s Analytics. Though markets and Fed officials themselves see only modest easing in the year ahead, Zandi expects the central bank to enact three cuts of a quarter percentage point each before midyear.
• “Behind the decision to ease monetary policy further will be the still flagging job market, particularly in the early part of 2026,” he wrote. “It will take more time for businesses to feel certain that they will not be wrong-footed by shifting trade and immigration policies and other threats before they resume hiring.” “Until then, job growth will remain insufficient to forestall further increases in unemployment, and as long as unemployment is on the rise, the Fed will cut rates.”
• Zandi’s forecast is at least a step ahead of both market and Fed expectations, both of which point to a slower pace of reductions. Market pricing currently points to two cuts, the first not coming until at least April and the second more likely in the back half of the year, probably around September, according to CME futures data.
• Fed policymakers have an even more cautious outlook. The central bank’s grid of individual officials’ expectations indicates just one cut through the entire year, according to an update presented earlier in December. Minutes showed the cut at the meeting was a close call, with officials seeing the likelihood of additional reductions but at a tepid pace.
• Zandi thinks the confluence of factors will cause the Fed to move more quickly. One wild card is the potential for President Donald Trump to remake the central bank’s hierarchy, with Trump appointees already on the board and more changes possible as terms expire, including Jerome Powell’s chairmanship in May and efforts to remove Governor Lisa Cook.
• “Trump will also pressure for lower interest rates. Federal Reserve independence will steadily erode as the president appoints more members to the Federal Open Market Committee, including the Fed chair in May,” Zandi wrote, adding that political pressure will intensify heading into the midterm elections. The FOMC meets again Jan. 27–28, and market pricing is putting just a 13.8% probability of a cut at that meeting.

(Source: CNBC)

• Mortgage rates are lower, home prices are easing and there is more supply on the market for sale. All of that adds up to improved affordability for today’s homebuyers. Saving for a down payment, however, is still the biggest hurdle for first-time buyers. Prices nationally are basically flat compared with where they were a year ago, according to Parcl Labs.
• They dipped into negative territory earlier this month and are now just 0.3% higher year over year. The latest S&P Cotality Case-Shiller home price index, which reflects pricing from October, showed large disparities among metropolitan markets, with Chicago, New York and Cleveland having the biggest gains and eight cities in negative territory, including Tampa, Phoenix and Dallas.
• “National home prices also continue to lag consumer inflation… roughly 1.8 percentage points higher than the latest housing appreciation… implying a slight decline in inflation-adjusted home values,” explained Nicholas Godec of S&P Dow Jones Indices. Mortgage rates, too, are coming down.
• The average on the 30-year fixed mortgage is currently 6.19%, down from well over 7% earlier this year. For a buyer putting down 20% on a $410,000 home, the monthly payment today is about $200 less than a year ago as weaker prices and lower rates change the math for first-time buyers.
• The typical homebuyer now needs seven years to save for a down payment, down from 12 years in 2022 but still roughly double pre-pandemic levels. Down payments continue to be the biggest hurdle to homeownership, which fell to 65%, the lowest level since 2019.
• An improved supply of homes for sale is adding momentum to the market, with active listings about 12% higher than a year ago, and pending home sales up 3.3% month-over-month and 2.6% year-over-year. “Improving housing affordability… and more inventory choices compared to last year are attracting more buyers to the market,” said Lawrence Yun.

(Source: CNBC)

• Jamaica’s international reserves remain at historically strong levels despite a weakened external position following the impact of Hurricane Melissa, which struck the island on October 28, according to the Bank of Jamaica (BOJ).
• BOJ Governor Richard Byles noted the country’s reserves stood at approximately US$6.3Bn in mid-December 2025, representing about 151% of the adequacy benchmark^[1]. International reserves are foreign-currency assets held by the central bank to pay for imports, stabilise the exchange rate and cushion the economy against shocks.
• Meanwhile, the Central Bank has intensified its interventions to maintain stability in the foreign exchange market since the passage of Hurricane Melissa. Byles reported that the BOJ has injected US$250Mn into the market, including the direct supply of foreign exchange to selected energy-sector players to remove large, irregular purchases from open trading. Nevertheless, the country’s international reserves are still anticipated to remain robust over the near to medium term.
• In the near term, the reserve position is expected to be supported by disaster risk financing, multilateral funding and grant inflows, including proceeds from the Caribbean Catastrophe Risk Insurance Facility and Jamaica’s catastrophe bond. Furthermore, gross reserves are projected to remain above the ARA 100% benchmark over the medium-term.
• The BOJ has also reinstated advance notices of foreign exchange intervention sales, a move which is expected to improve market expectations around liquidity. As a result, the exchange rate remained broadly stable between November 1 and mid-December, relative to end-October levels. Over the 12 months to the end of November 2025, the BOJ sold approximately US$1.1Bn through its B-FXITT facility, broadly in line with sales over the previous year. During the same period, net foreign exchange purchases totalled about US$1Bn.
• That said, risks to the reserve projections are tilted to the downside. The main downside risks stem from weaker remittance and travel inflows, reflecting slower growth in source markets and a more protracted recovery in the tourism sector. In addition, net private capital inflows could fall short of projections. As such, if these downside risks materialise, pressures in the foreign exchange market could be more protracted than projected.

_______________________

¹The International Monetary Fund’s Assessing Reserve Adequacy (ARA) metric

(Sources: Caribbean National Weekly & BOJ)