The Bank of Jamaica (BoJ) has lowered interest rates for a second time this month in response to stronger-than-projected economic outturn for the first half of 2006, according to the central bank.

On Friday, the BoJ announced in a press release that it revised rates downwards by 20 basis points, or 0.2 per cent, across all tenors - 30-day to 180-day - open market instruments.

The new rates range from 11.95 to 12.3 per cent. Three weeks prior, the central bank lowered rates by 30 basis points, or 0.3 per cent, across all tenors.

"This action reflects the stronger-than-anticipated performance of the Jamaican economy for the first half of the fiscal year. Inflationary pressures have moderated, as reflected in headline inflation of 0.3 per cent for August 2006, and a cumulative change of 4.6 per cent for April to August," said the central bank.

Expectations to be met

It reiterated expectations that single-digit inflation - currently running at 4.7 per cent year to date - will be met.

The net international reserves (NIR) - used as a measure of the cushion that Jamaica has to pay its import bills and a signal of the monetary authority's ability to defend the dollar - was US$2.3 billion as at September 21.

The reserves, said the central bank, were "buoyed by strong earnings and capital inflows."