The Dominican Republic maintains its monetary policy rate at 8.50% per annum by EFE

Santo Domingo, April 28 (EFE). – The Dominican Central Bank reported on Friday that it is maintaining, for the sixth consecutive month, its monetary policy rate at 8.50% per annum.

Similarly, the perpetual liquidity expansion facility rate (one-day repo agreements) remains at 9.00% per annum and the interest-bearing deposit rate (overnight) is at 8.00%.

The issuer said its decision was based on a “comprehensive assessment” of recent economic behaviour, particularly inflation.

In a statement, the bank said that with this arrangement, moderation is maintained in international prices for raw materials, while container transportation costs and disruptions in global supply chains continue to decline.

“On the domestic level, inflation continues to decline as a result of the monetary restriction program, government support and the moderation of domestic demand,” he added.

The central bank noted that the monthly variation of the consumer price index (CPI) was 0.21% in March.

With regard to inflation on an annual basis, it was expected to be around 5.20%, while core inflation, which excludes the “most volatile” components of the basic basket, also shows a downward trend, from 7.29% in May 2022 to 6.16% in March 2023, with an expected It may drop to approximately 5.8% at the end of April.

The agency said that this decrease in inflationary pressures reflects the effectiveness of the monetary policy transmission mechanism after the gradual increase in the TPM by 550 basis points between November 2021 and October 2022.

“Under current projections, it is estimated that the TPM and liquidity in the economy are at sufficient levels for inflation to converge on the target range of 4% ± 1% over the next few months,” the central bank noted.

The institution responsible for fiscal policy considered that credit for the national currency begins to show signs of “moderation,” as it moved from an annual growth of nearly 15% at the end of 2022 to an expansion of about 13% in April 2023.