By Dennise Williams, Staff ReporterTHE BANK of Jamaica (BoJ) has once again lowered the rates on its open market instruments. Following the pattern of its last rate decrease on April 19, the central bank has dropped between 20 to 50 basis points. Thirty-day rates are now 14.2 percent down from 14.4 per cent while the 365-day rate are now 16.4 per cent down from 16.9 per cent. (See table)
According to the BoJ "Interest rates applicable to Bank of Jamaica open market instruments have been reduced with effect from yesterday. The adjustments range from 20 basis points on 30-90 day instruments to 50 basis points on 365-day placements. This general reduction in interest rates occurs in the context of continued stability in the money and foreign exchange markets and a steady improvement in the net international reserves. These conditions are consistent with the achievement of single-digit inflation for the fiscal year. "
According to Chairman of Today's Money, Orville Johnson, "The rate cut is a result of many things. The stock market is doing well and the exchange rate is not under significant pressure. Remember the high interest rate policy was instituted to defend the exchange rate and since the dollar has maintained its value, I'm sure the Government felt comfortable to lower rates."
Keith Collister, business development manager of First Global Securities. agrees that the continued lowering of rates is part of the Government's strategy to "get the economy moving."
