The Economic Programme Oversight Committee (EPOC) says loans from the banking sector to households and businesses declined by 2.3?ter adjustment for inflation during the month of September due to the high interest rate regime and the slowdown in the economy.
Loans to households fell by 6% while credit to businesses climbed by 1.4%.
Commercial banks have not reduced their lending rates or increased their savings rates, although the Bank of Jamaica hiked rates to contain inflation during the last two years and is now lowering them because inflation is falling.
Meanwhile, the Bank of Jamaica says it will be increasing the country’s money supply by only 0.5?ter adjustment for inflation.
This is in contrast to the 11% increase for the similar period last year.
The central bank also says the $289.3 billion which will be in circulation at the end of December this year will be 9.2% or $24.4 billion more than
the amount recorded at the end of November this year.