The Bank of Jamaica wants commercial banks to lower their interest rates, but what will it take to get it done?

So the BOJ is again calling for banks to drop their interest rates after the latest policy rate drop.

The central bank cut its own base interest rate from 6% to 5.75 % recently. Overall, the policy rate is down 125 basis points from 7 percent last year.

When the BOJ lowers its policy rate, it’s meant to signal that banks should also lower the interest rates they charge customers. This helps people and small businesses get loans at better rates, which can help the economy grow. 

But right now, most institutions have not lowered their rates much, if at all.

Following this latest cut, BOJ Governor Richard Byles said it was a “powerful signal” to banks that the BOJ wants rates to go lower.

The central banks hopes that by lowering its policy rate, banks will also lower their rates, making it easier for people and businesses to get loans, which can help the economy grow and create more jobs. 

Speaking on Taking Stock recently, Founder of Wealth Watch Ja, Julian Morrison said the BOJ will have to make even more cuts before we see any real movement.

Watch here-Taking Stock LIVE – How is the JSE performing? Massy’s Recent Results; Tropical Battery APO


Back in January, Byles even said that if banks keep refusing to lower their rates, the government might have to make new laws to fix the problem. 

And that’s the bottom line.

So what do you think? Should there be a law to force to banks to lower their interest rates in line with the BOJ’s rate cuts? 

And if you want to learn more about how interest rates affect your investments, check out my new book on Amazon.  

Let’s get this money!