The Bank of Jamaica (BoJ) has cut 30 basis points off all its open-market instruments as policymakers continue their downward pressure on interest rates.

Signal rates are now a nominal 12.15 per cent to 12.50 per cent. The adjustment at the top end of the tenors, on the 180-day instrument, was 29 basis points below the 12.79 per cent that the market had demanded on the last six-month Treasury Bill issued August 23.

The cut in rates, which took effect Friday, September 1, was justified, the central bank said, by positive economic indicators such as the decline in headline inflation which is running 4.4 per cent calendar year to July.

Annualised, that figure is 7.54 per cent, which would put real rates on the BoJ tenors between 4.61 and 4.96 per cent.

The bank said it expects the target of single digit inflation to be met.

Additionally: "There has been an extended period of stability in the foreign exchange market, underpinned by buoyant capital inflows and stronger than anticipated inflows from tourism and remittances," said the central bank.

Import bills

The Net International Reserves (NIR) - used as a measure of the cushion that Jamaica has to pay its import bills and a signal of the monetary authority's ability to defend the dollar - was US$2.2 billion as at August 31, which the central bank said was "significantly above programme."

"With more than ample reserves, the bank is in a stronger position to manage any seasonal fluctuation in demand for foreign exchange or any exogenous shock to the market," said the BoJ.