The Central Bank of the Dominican Republic (BCRD) is keeping the monetary policy interest rate at 3% per year. The policy interest rate is an interest rate that the Central Bank sets to influence the evolution of the economy’s main monetary variables (e.g. consumer prices, exchange rate or credit expansion, among others).
Likewise, the Central Bank announces the 1-day Repos interest rate remains at 3.50% per year and the overnight interest rate is at 2.50% per year.
The reference rates’ decision is based on the comprehensive analysis of the impact of the Covid-19 pandemic on economic activity and future inflation trends. In particular, the monthly change in the Consumer Price Index in September was 0.60%, while cumulative inflation during the first nine months of the year was 3.74%.
The Central Bank has reported that year-on-year inflation (from September 2019 to September 2020) reached 5.03%, that is around the upper limit of the target range of 4.0% ± 1.0%. The Central Bank says that the drought at the beginning of the year, followed by the Isaias and Laura tropical storms affected food products’ supply. Likewise, it mentions the increase in imported food products, such as wheat, soybeans and corn, and the rise in freight and transportation costs.
The Central Bank points out that core inflation, which excludes the most volatile components of the basic basket, reached 4.34% in September, close to the target range of 4.0% ± 1.0%.
Read more in Spanish:
Central Bank
El Dinero
2 November 2020