Tag: inflation
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How the Bank of Jamaica Sets Interest Rates to Control Inflation
Jamaica targets an inflation range of 4% to 6%. This allows flexibility because the economy is highly exposed to external shocks, such as volatile oil prices, global economic changes, and weather events like hurricanes or droughts. There are three main channels that the Bank of Jamaica uses to control inflation, as explained in Monetary Transmission…
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The Story Behind Jamaica’s Floating Exchange Rate
Today the Jamaican dollar moves freely in response to supply and demand in the foreign exchange market. This was not always the case. Jamaica’s current system—where the exchange rate is largely market-determined—is the result of a long transition from a tightly controlled foreign exchange regime to a modern monetary policy framework. For many years, Jamaica…