The Bank of Jamaica is standing firm behind its decision to continue increasing interest rates despite growing discontent over the move.

At a media briefing this morning, the Central Bank warned that without taking action to control inflation the country could be facing a dangerous runaway catastrophe.

BOJ Governor, Richard Byles, also says the effect of their decision will not have as material an impact on growth as many are suggesting.

Chevon Campbell reports:

An avalanche!

Deputy Governor of the Bank of Jamaica, Robert Stennett, made it clear that if measures are not put in place now to temper inflation it may become too late.

Jamaica’s point to point inflation rate is running at 8.5% as at the end of October.

It’s well above the 4 to 6 % range the central bank has been mandated to maintain.

The effect is already being felt in rising commodity and food prices locally.

The Central Bank earlier this week increased it’s policy rate by 50 basis points in an effort to lower demand and therefore drive inflation back within range.

This moved the previous one-point-5-0 per cent rate to two per cent.

It quickly followed a prior decision in October to hike the rate by one percentage point.

BOJ Governor, Richard Byles, says had the bank not acted, the country would be having a very different discussion today.

At least three private sector groups and the opposition PNP have come out against the move by the newly empowered independent Bank.

They’re concerned it will hamper economic growth in an economy still grappling with the effects of the COVID-19 pandemic.

However, Mr. Byles says the improvements in the country’s economy are driven by a resurgence in tourism.

He argues that this will not be negatively affected by the decision made by the central bank.

Meanwhile, the Bank of Jamaica says the economy remains on track to grow between 7 and 10 per cent for the fiscal year.

He says this growth will be driven by the tourism sector.

However, the Central Bank Governor says the temporary shuttering of the Jamalco bauxite alumina plant and adverse weather has hampered this forecast.

But, Mr. Byles remains bullish about Jamaica’s economic recovery.

Richard Byles, Governor of the Bank of Jamaica.

He was speaking at the Bank’s quarterly media briefing held virtually this morning.