The Bank of Jamaica cut the policy interest rate offered on its overnight deposits by 25 basis points to 2.50%.
The central bank said it projects inflation over the next three quarters to fall below the lower end of its target of 4% to 6%, before rising toward the middle of the target in the next quarter.
The bank cited a large decline in agricultural food prices and increases in crude oil prices as the bases for its inflation expectations. The medium-term outlook for inflation reflects a slow recovery in Jamaica's real economy, despite projections showing a modest rise in economic growth.