Economist, Dr. Damien King, says the irresponsible and shortsighted actions of the political directorate over the years have justified the need for the country to have an independent central bank.
The noted economist argues that the Bank of Jamaica’s move to tackle high inflation runs counter to the electoral interests of governments of the day.
The BOJ has once again moved to increase its policy interest rate by another 50 basis points, effective today.
In a statement yesterday, the BOJ says the rate offered to deposit-taking institutions on overnight placements has now moved to 2.50 per cent per annum.
The move is the latest in the Central Bank’s continued defense of its inflation target.
Annual inflation fell in November to 7.8 per cent, down from 8.5 per cent in October.
But the rate is still nearly three percentage points outside the upper end of the target range of 4 to 6 per cent.
Dr. King says this is important because those in poverty have the greater portion of their wealth in physical cash.
The central bank is forecasting that inflation won’t return to the target range for another eight to 10 months, that is, up to midsummer 2022.
But there’re those in the business sector who believe the move by the BOJ will harm the nation’s economic recovery.
However, Dr. King says if the bank does not act now it might be too late.
Dr. Damien King, Economist.
He was speaking on Nationwide This Morning with Ricardo Brooks and Chevon Campbell.