The restrictive policy of the Central Bank has had partial results, Esteban Delgado wrote in El Dinero on 21 April 2022.
He explains that the peso appreciated from around RD$58.00 per US dollar to less than RD$55.00 at the beginning of March. Currently, it is listed at RD$55.50 per one in financial intermediation entities and agencies.
Yet while for many the improvement in the buying power of the peso may be a good thing, Delgado highlights that the problem is that the appreciation of the Dominican peso against the US dollar has not brought a reduction in local prices.
In the recent analysis in El Dinero, he mentions that the inflation measured by the Consumer Price Index (CPI) in the year 2021 was 8.5%. While at the end of March this year, according to the Central Bank’s own statistics, annualized inflation (March 2021 to March 2022) is at 9.02%. That is, inflation has been increasing instead of decreasing.
So far, the Dominican Republic is listed among the first five countries in Latin America with the highest inflationary levels. The economic writer says this casts a shadow over the otherwise positive impact of the favorable growth of the economy during the past year (12.5%) and in the first two months of this 2022, with 6%.
On the negative side, the monetary authorities decision to force an appreciation of the peso against the dollar in the first two months of this year has brought concern to exporters, who say this makes their goods and services less competitive.
As reported in El Dinero, the Dominican Association of Exporters (Adoexpo) reports that it remains alert to movements in the exchange rate. Meanwhile, the Central Bank has moderated its aggressive policy of appreciation of the peso. However, it maintains measures to restrain money in circulation, with a new increase in the monetary policy rate, which rose to 5.50%, that is, 100 basis points above the 4.50% it was before the pandemic.
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El Dinero
26 April 2022