The Bottom Line - BOJ Warns of Inflation Spike After Hurricane Melissa

BOJ Warns of Inflation Spike After Hurricane Melissa

November 27, 2025

The Bank of Jamaica has injected J$4 billion and released US$210 million to steady the economy after Hurricane Melissa.

Tourism and agriculture took the biggest hit, pushing up cash demand and inflation. Even with all of BOJ's interventions, recovery in the economy will take some time. Here's what it means for you and your money.

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Jamaica’s banks have gotten J$4 billion in emergency cash from the central bank following Hurricane Melissa.

So the Bank of Jamaica (BOJ) has been taking emergency measures to ensure people have access to cash following the hurricane. They also need to try to keep the Jamaican dollar stable, and keep inflation from spiking too high. So the BOJ has been busy.

So far, they’ve injected almost J$4 billion in emergency cash into commercial banks. That’s because a lot of people have been depending on cash following the hurricane, so they’ve been giving banks more money to meet the demand.

They’ve also waived RTGS transaction fees so that you can get your money faster when doing bank transfers.

Now another concern is the value of the Jamaican dollar, given the devastation to the tourism industry. According to the PIOJ, 89% of all hotel rooms in Jamaica are in the seven most affected parishes. That means we’re not earning US dollars from tourism, but we’re still spending US dollars. That’s going to cause the exchange rate to go up.

The central bank is trying to prevent that, at least to some extent. So far, they’ve pumped US$210 million into the forex market to help keep the dollar stable after Melissa.

They’re also keeping interest rates steady in the hopes of helping inflation stay down, although even with interventions, inflation is naturally going to spike. The BOJ estimates that prices won’t come back to “normal” until early 2027.

Agriculture and energy are two of the most heavily weighted sectors of the Consumer Price Index (CPI), which is used to calculate inflation. The seven hardest-hit parishes make up 74% of Jamaica’s agricultural output. The storm also caused major infrastructure damage to the power grid. It will require complete rebuilds in some areas to restore power.

The BOJ said raising interest rates now would just worsen the hardship. It would make costs higher but wouldn’t solve the supply issue. So for right now, the plan is to keep interest rates steady while the country recovers.

And that’s the bottom line.