JM Interest Rate Decision Analysis: November 2025
The Bank of Jamaica held the policy rate steady at 5.75% in November 2025, maintaining a pause after a series of cuts since mid-2024. Inflation pressures have eased moderately, but external risks and fiscal constraints suggest cautious monitoring ahead. Financial markets showed muted reaction, reflecting confidence in the central bank’s balanced approach amid evolving global uncertainties.
Table of Contents
The Bank of Jamaica’s latest Interest Rate Decision, released on November 24, 2025, confirmed the policy rate at 5.75%, matching market expectations and the previous reading. This steady stance follows a downward trajectory from a peak of 6.75% in August 2024, reflecting a gradual easing cycle over the past 15 months. The decision aligns with a backdrop of moderating inflation, stable growth, and cautious external risk management.
Drivers this month
- Inflation slowed to 3.80% YoY in October 2025, down from 4.50% six months prior.
- GDP growth stabilized at 1.90% YoY in Q3 2025, supported by tourism and remittances.
- External shocks, including commodity price volatility and geopolitical tensions in the Caribbean basin, remain key risks.
Policy pulse
The 5.75% rate sits comfortably within the Bank of Jamaica’s inflation target range of 4% ±1%, suggesting a neutral monetary stance. The pause signals a wait-and-see approach to assess the lagged effects of prior easing and external developments.
Market lens
Immediate reaction: The Jamaican dollar (JMD) remained stable against the USD, with the USD/JMD pair fluctuating less than 0.10% in the first hour post-announcement. Short-term government bond yields held steady, reflecting market confidence in policy continuity.
Core macroeconomic indicators provide essential context for the interest rate decision. Inflation, growth, employment, and fiscal metrics collectively shape the monetary policy outlook.
Inflation trends
According to the Sigmanomics database, inflation in Jamaica eased to 3.80% YoY in October 2025, down from 4.50% in April 2025 and 6.20% in November 2024. This decline reflects lower food and energy prices, as well as subdued domestic demand pressures.
Economic growth
Real GDP growth stabilized at 1.90% YoY in Q3 2025, slightly below the 2.30% average of the previous four quarters but above the 1.50% recorded in Q3 2024. Key sectors driving growth include tourism, which rebounded 12% YoY, and remittances, which rose 8% YoY, supporting household consumption.
Fiscal policy & government budget
The government’s fiscal stance remains moderately tight, with a primary surplus of 1.20% of GDP in the first half of 2025, down from 1.80% in 2024. Public debt stands at 95% of GDP, constraining fiscal space and increasing sensitivity to interest rate changes.
Drivers this month
- Stable inflation near target reduces urgency for further cuts.
- Moderate GDP growth supports steady policy.
- External uncertainties warrant caution.
This chart highlights a clear trend of gradual rate easing reversing the tightening cycle of 2023-24. The pause at 5.75% suggests the central bank is monitoring the impact of prior cuts before adjusting further. The steady rate supports financial stability amid external volatility.
Market lens
Immediate reaction: The 2-year government bond yield held at 6.10%, unchanged from the prior day, indicating market acceptance of the steady rate. The Jamaican dollar’s exchange rate showed minimal volatility, underscoring confidence in the central bank’s communication.
Looking ahead, the Bank of Jamaica faces a complex environment balancing inflation risks, growth prospects, and external shocks. The policy trajectory will depend on evolving data and geopolitical developments.
Scenario analysis
- Bullish (30% probability): Inflation continues to ease below 3.50%, growth accelerates above 2.50%, allowing for a 25-50 bps rate cut in Q1 2026 to stimulate investment.
- Base (50% probability): Inflation hovers near 4%, growth remains steady around 2%, and rates stay at 5.75% through mid-2026, with gradual adjustments as needed.
- Bearish (20% probability): External shocks push inflation above 5%, growth slows below 1%, prompting a possible rate hike of 25 bps to anchor inflation expectations.
Risks and opportunities
Upside risks include stronger tourism recovery and remittance inflows boosting growth. Downside risks stem from commodity price shocks, fiscal slippage, and regional geopolitical tensions. The central bank’s flexibility and communication will be key to navigating these uncertainties.
The Bank of Jamaica’s November 2025 Interest Rate Decision reflects a cautious but steady approach amid improving inflation dynamics and moderate growth. The maintained 5.75% rate signals confidence in the current policy path while acknowledging external risks. Market responses have been muted, indicating trust in the central bank’s strategy.
Going forward, close monitoring of inflation trends, fiscal discipline, and external developments will be critical. The central bank’s ability to adapt to changing conditions will shape Jamaica’s macroeconomic stability and growth trajectory in 2026.
Key Markets Likely to React to Interest Rate Decision
The interest rate decision in Jamaica typically influences currency valuations, bond yields, and equity markets. The following tradable symbols historically track or react to changes in the Bank of Jamaica’s policy rate:
- USDJMD – The Jamaican dollar’s exchange rate versus the US dollar is sensitive to interest rate changes, affecting capital flows and inflation expectations.
- JMMARKET – Jamaica’s equity market often responds to monetary policy shifts through investor sentiment and cost of capital.
- BTCUSD – Bitcoin’s price can reflect broader risk appetite changes influenced by interest rate environments in emerging markets.
- EURUSD – While indirect, shifts in USD strength impact the Jamaican dollar and regional trade balances.
- JAEX – The Jamaica Stock Exchange index tracks domestic economic health and monetary policy effects on corporate earnings.
Insight: Interest Rate vs. USDJMD Exchange Rate Since 2020
| Year | Policy Rate (%) | USDJMD (Year-End) |
|---|---|---|
| 2020 | 5.00 | 150.25 |
| 2021 | 5.25 | 152.10 |
| 2022 | 6.00 | 155.75 |
| 2023 | 6.50 | 158.40 |
| 2024 | 6.25 | 157.00 |
| 2025 | 5.75 | 154.50 |
This table shows a modest inverse correlation between the policy rate and the USDJMD exchange rate. As rates rose in 2022-23, the Jamaican dollar weakened slightly, reflecting inflation pressures. The recent easing cycle has coincided with a modest strengthening of the JMD.
FAQs
- What was the latest Interest Rate Decision for JM?
- The Bank of Jamaica held the policy rate steady at 5.75% on November 24, 2025, maintaining the rate from previous months.
- How does the Interest Rate Decision impact inflation in JM?
- The decision aims to keep inflation near the 4% target by balancing monetary tightening and easing, influencing borrowing costs and consumer prices.
- What are the main risks facing JM’s monetary policy?
- Key risks include external shocks like commodity price volatility, fiscal deficits, and geopolitical tensions in the Caribbean region.
Takeaway: The Bank of Jamaica’s steady 5.75% rate reflects a cautious balance between supporting growth and anchoring inflation, with future moves hinging on external risks and domestic fiscal discipline.
USDJMD – Jamaican dollar exchange rate vs. USD, sensitive to interest rate changes.
JMMARKET – Jamaica’s equity market, influenced by monetary policy shifts.
BTCUSD – Bitcoin price, reflecting risk appetite affected by interest rates.
EURUSD – Euro-dollar pair, indirectly impacting Jamaican currency dynamics.
JAEX – Jamaica Stock Exchange index, tracking domestic economic health.
The interest rate has remained at 5.75% for the third consecutive decision, unchanged from the previous month and significantly lower than the 6.75% peak recorded in August 2024. This marks a cumulative 1 percentage point reduction over 15 months, reflecting a measured easing cycle.
Comparing the current rate to the 12-month average of 6.20%, the Bank of Jamaica has clearly shifted towards a more accommodative stance, aiming to balance inflation control with growth support.