Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, is encouraging banks to respond to the reduction in interest rates by the Bank of Jamaica (BOJ), by lowering their interest rates.
Last August, the Central Bank reduced its benchmark policy rate by 25 basis points, bringing the rate from seven per cent to 6.75 per cent per annum.
Effective, December 23, 2024, the BOJ’s benchmark rate was six per cent, reflecting four rate cuts of 25 basis points during the period.
“We need to make sure the banks understand that and people need to see that. Economic growth is what we have to do, after we put our fiscal house in order,” Senator Hill said, as he addressed Wednesday’s (January 29) post-Cabinet press briefing at Jamaica House.
Senator Hill emphasised that economic growth cannot happen in an environment with very high interest rates.
“It’s in the banks’ interest; it’s in ordinary Jamaicans’ interest who will pay less interest, and it’s in business interest that the bank lending rates come down as quickly as they can,” he said.
The Minister reasoned that banks have to run their businesses, and the Government wants to make sure that they are profitable; however, more can be done to adjust rates downward to customers.
“The Central Bank has indicated that the non-performing loans of the bank is about 2.4 per cent. That’s a very, very acceptable number, so we know we’re not pressuring the bank to go and make bad loans… . We need to make sure that we get those rates down,” he appealed.
