Bank of Jamaica (BOJ) Governor Richard Byles is not happy that the commercial banks have not ‘received the memo’ about reducing lending rates, consistent with the lowering of the central bank's policy rate. He recognises that current rates cannot benefit consumers, business and the economy the way lower rates can.

Lending rates are just one set of interest rates which, overall, affect savings, consumption, investment by businesses and individuals, the exchange rate, and economic performance. They are relevant in even a general discussion on high interest rates because of the generally wide gap between them and other interest rates.  These rates have a material impact on consumers in an economy that recorded inflation of 4.3 per cent over 12 months to April 2026.

When interest rates are high, bond yields are also high, thus being beneficial to corporate investors like insurance companies, pension funds and unit trusts, and individual bond investors. Variable-rate instruments are particularly attractive to investors, especially when rates are increasing. Although fixed-rate instruments may pay good interest, in an environment in which rates are increasing, they are locked into the initial rate and their prices fall as rates increase. Nonetheless, bondholders suffer no loss if they hold the instruments to maturity.