As part of efforts to contain rising inflation, the Central Bank (BCRD) announced the increase of the monetary policy interest rate from 5.50% per year to 6.50% per year. The permanent liquidity expansion facility (1-day Repos) increases from 6.00% to 7.00% per year and the rate for interest-bearing deposits (Overnight) is up from 5.00% to 6.00% per year.
BCRD explained that the decision is based on a thorough evaluation of the recent behavior of the world economy and its impact on inflation, influenced by the recent geopolitical conflicts and the global cost shock. The Central Bank mentions that price dynamics have been affected by external factors more persistent than expected. The significant increase in oil prices and other critical raw materials for local production and the high costs of international container transportation and other disruptions in supply chains are affecting the local cost of goods and services.
The Central Bank says that in addition to these external components, adjustments in the tariffs of private and public domestic services are influencing the upward trend in inflation during the last few months.
The monthly variation of the consumer price index (CPI) in April 2022 was 0.96%, while inter-annual inflation, i.e. in the last 12 months, is at 9.64%.
In a statement the Central Bank indicates that the Dominican economy is in a good position to mitigate the adverse shocks, taking into account the strength of macroeconomic fundamentals, the good performance of domestic demand and the high levels of international reserves.
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Diario Libre
1 June 2022