brian wynter : bank of jamaica modernisation and independence - a new central bank for the new jamaican economy speech by mr brian wynter, governor of the bank of jamaica, at the 3rd caribbean finance & investment forum " bank of jamaica modernisation and independence - a new central bank for the new jamaican economy ", organised by latinfinance, kingston, 1 november 2018. * * * mr chairman, mr taimur ahmad, chief executive officer, latinfinance, distinguished ladies and gentlemen, good afternoon. last week, the government tabled in parliament a bill to amend the bank of jamaica act and related legislation. if passed, this would make bank of jamaica the first central bank in the english - speaking caribbean to have legislative independence. it is interesting to note that this potentially seismic shift in jamaica's economic fortunes was broadly met by quizzical faces and comments like : " i thought they were already independent ". to shed some light on why people reacted in this way and why i have referred to it as a potentially seismic shift, i will sketch a map of bank of jamaica's transformation and draw a picture of the intended destination. i would like to show you, in short, why we are doing what we are doing. bank of jamaica has enjoyed de facto independence since the 1990s and the process of modernisation can perhaps be dated back to the early 2000s. modernisation began with the bank operating with what the imf refers to as an inflation - targeting'lite'regime. inflation - targeting is a monetary policy regime where the inflation objective is announced to the public and the central bank uses various monetary policy tools to guide inflation outcomes towards the preannounced inflation objective. the bank was initially able to reduce inflation from 9. 2 percent in 1997 to 7. 3 percent in 2002 using a base money targeting approach. since then, the bank transitioned to using interest rates as the primary operating tool. if you examine the success of that transition, particularly in the last decade or so, you would note that we are now in an era of lower inflation that has been more stable and more predictable than it was in the past. at september 2018, 12 - month inflation was 4. 3 per cent, within the bank's target of 4. 0 per cent to 6. 0 per cent, having fallen to as low as 1. 7 per cent in 2016. in effect, the bank has been operating independently using modern approaches for quite a long time and it has

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