Interest Rate Risk Monitor: Introduction and Overview
Most discussion on interest spreads in Jamaica is based on the difference between the
average loan rate and the average rate on time deposits as published by BOJ. For many
years, the rate payable on savings deposits was controlled and was adjusted periodically
to ensure a real interest return for small savers. Rates on time deposits varied according
to market conditions and hence represented a more accurate measure of commercial bank
pricing policy. For this reason, the spread published by BOJ over a long period has been
the difference between the average loan rate and the...