Jamaica's central bank on May 20 decided to cut its policy interest rate by 50 basis points to 0.75% due to subdued inflation expectations.

Bank of Jamaica said that while it expects inflation to rise to an average 4.5% over the next eight quarters, the indicator will sometimes fall below the lower limit of its 4.0%-6.0% target. The central bank still believes inflation will gradually approach the midpoint of its target, albeit at a slower pace than previously expected.

The rate decision also seeks to accelerate growth in private sector credit, which would prop up economic growth and support inflation targeting, the central bank said.

April annual inflation hit 3.9%, up from 3.4% in the previous month and 3.2% a year ago.