richard byles : jamaica's recent inflation performance and outlook statement by mr richard byles, governor of the bank of jamaica, to the standing finance committee of parliament, kingston, 23 july 2024. * * * good afternoon : bank of jamaica welcomes this opportunity to once again appear at the standing finance committee to discuss our conduct of monetary policy. the monetary policy report for the six - month period ending march 2024 was tabled in accordance with the bank of jamaica act. my remarks will largely be focussed on our recent policy decisions, which are aimed at fulfilling our primary mandate of price stability, as well as to update the committee on other relevant developments. recent monetary policy developments over the past three years, bank of jamaica ( boj ) has tightened monetary policy by utilising a three - pronged approach. specifically, the bank has : ( i ) increased the policy rate by 650 basis points to 7. 0 per cent, which resulted in small increases in dtis'loan rates and moderate increases in their deposit rates ; ( ii ) tightened jamaica dollar liquidity in the money market using our open market operations, which led to increases in private money market interest rates ; and ( iii ) utilised our foreign reserves to maintain relative stability in the foreign exchange market. this tight monetary policy stance was appropriate given that inflation had significantly increased from a low of 3. 8 per cent at april 2021 to a high of 11. 8 per cent at april 2022 and, thereafter, remained outside the target range of 4. 0 to 6. 0 per cent for several months. the bank's policy actions were designed to reduce inflation by constraining domestic aggregate demand and minimising the impact of imported inflation by inducing more stability in the foreign exchange market. the incoming data for inflation, inflation expectations, wage increases and the balance of payments suggest that there has been significant success in the fight against high inflation in jamaica. in this context, on 28 june 2024, bank of jamaica ( boj ) announced the monetary policy committee's ( mpc's ) decision to start a gradual easing of its monetary policy stance. the first step involves gradually reducing boj's absorption of liquidity from dtis through open market operations, thereby facilitating : ( a ) the channelling of additional credit to the productive sector ; and ( b ) gradual reductions in money market interest rates. however, the mpc decided to maintain the policy rate at 7. 0 % at this time and

system. measures are also needed to tackle negative systemic developments resulting from the interaction of individual decisions even when well - founded – measures which aim to mitigate negative systemic effects on the stability of financial institutions. such measures would be incumbent upon the financial literacy and skills of the economic agents and, in particular, their 1 / 3 bis central bankers'speeches ability to interpret the signs that result from the intervention of the prudential authorities. as a rule, a reduced capacity to interpret this intervention creates a greater risk of a bubble developing in the market and as a consequence determines a need for more interventionist prudential measures on the credit granting side or on the savings application side, to guarantee financial stability. financial literacy and education are therefore key for financial stability and for the nature of conduct and macroprudential supervision policies. in short, to safeguard financial stability, it is not enough to monitor individual choices or to regulate the conduct of banking institutions with their customers. it is also necessary to monitor the system as a whole, to mitigate the negative externalities of individual actions, as well as the supervision of each financial institution to ensure its financial strength, in particular its capacity to absorb the risks resulting from the application of the resources entrusted to it. the relevance of financial literacy and education has increased even more with the globalisation of markets and growing sophistication of products. widespread access to banking products and services that are ever more diverse and complex and the emergence of new sales channels have all brought new risk sources. we have therefore seen, at international level, the progressive strengthening of the framework of rights granted to banking customers, a broadening of areas of intervention for conduct supervision and more intrusive action by the supervisors. the objective is to encourage the adaptation of products and services to the characteristics and needs of customers and prevent conflicts between the interests of customers and institutions. financial information and education for banking customers has also come to be seen as a structural dimension of banking conduct supervision, complementary to regulation and oversight. more informed customers and with a greater ability to understand the characteristics of banking products and services are generally more attentive and demanding. they are also better prepared to choose banking products and services more suited to their financial situation, needs and risk profile, thus contributing to the efficient operation of the market and to safeguard financial stability. banco de portugal ’ s conduct supervision strategy banco de portugal began exercising its conduct supervision mandate at the outbreak of the international financial crisis. we have adopted a strategy based on three