Kingston, Jamaica: April 15, 2021
The Minister of Finance and the Public Service, Dr. Nigel Clarke, issued the following statement:
"The Bank of Jamaica (Amendment) Act, 2020 ("the Act") takes effect on Friday April 16, 2021. With effect from this date, Jamaica's central bank will be operationally independent; with its principal objectives being the maintenance of price stability and financial system stability with the primary objective being the maintenance of price stability. With effect from Friday, April 16, the Minister will no longer have the power to issue directions on monetary policy, and, as such, the Bank of Jamaica ("BOJ") will unambiguously have operational independence in the implementation of monetary policy.
One of the BOJ's new statutory committees– the Monetary Policy Committee – will seek to achieve and maintain price stability through the achievement of an inflation target, set by the Minister of Finance in consultation with the Governor of the BOJ, as required under the Act. To ensure transparency and accountability the notification of the inflation target, and minutes of the Monetary Policy Committee meetings will be made public in accordance with the Act.
The oversight capacity of the Board has been strengthened and the governance of the BOJ has been made more robust by staggered board appointments, which prevent the entire board from being changed in a single political administration. Instead, a single board vacancy will arise every two (2) years.
Furthermore, the Act now prohibits the Government of Jamaica from borrowing from the central bank, except in a declared national emergency by way of an order made by the Minister, subject to affirmative resolution, and in keeping with the provisions of the Act.
The principles of transparency and accountability which underpin the modernisation and operational independence of the BOJ are designed to ensure better economic outcomes.
This institutionalisation of stability reduces risk premia and borrowing costs over the long term as there will be increased certainty about the conduct of monetary policy long into the future. This will create the conditions for longer term planning, deepening of financial markets and greater financial inclusion.
Further information about the operational independence of the Bank of Jamaica can be found via http://www.boj.org.jm/."
For further information contact:
Corporate Communication & Public Relations Branch
Ministry of Finance and the Public Service
30 National Heroes Circle
Tel: (876) 932-4656/4660/4655
Contact: Shelly-Ann Weeks/Daniel Passley
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