The Consumer Price Index shows a 1.13% decline in September compared to August, according to the Central Bank. The Central Bank points out that this is the first time that in September there is a decline in inflation. September is usually a month when prices increase primarily because it is the month when stores stock up for Christmas inventories.
The decline in inflation is primarily attributed to the appreciation of the peso. Inflation through August is at 32.61%.
While the peso has appreciated 30% in recent weeks to around RD$33-US$1, prices have been slower in falling in the DR, many stagnating after the government increased the ITBIS tax on sales from 12 to 16%.
On the other hand, businesses are now returning prices that had been set in US$ to peso prices.
Many prices had been set to the RD$54-US$1 mark and now need to be adjusted. Stores say they need to sell the goods they purchased at higher prices. Nevertheless, when they had purchased inventories at lower prices, they were prompt to adjust these to what it would cost them to restock.