During the monthly meeting of the officials of the Central Bank of the Dominican Republic, the authorities decided to lower the prime rate yet again, going 25 basis points from 6.50% to 6.25%. The Overnight rates went from 5.00% to 4.75%. These moves follow events on the international scene where interests were going lower in most of the G-20 nations, and with lower prices for raw materials.
Another consideration was the fact that, as Central Bank governor Hector Valdez Albizu stated during a recent visit to Washington, DC, the inflation rate in the country is staying within the forecast rates of 4% (+/-1%). This latest move by the Central Bank completes a 2.25% decrease from May of 2023 when the bank began a program of providing liquidity through which the bank channeled some RD$200 billion through private banks at just 9%.
On the international scene, there were positive numbers from the United States where the US Federal Reserve dropped 50 basis points from the prime rate.
An important factor in all of this is the lower price of a barrel of West Texas Intermediate (WTI) which is the crude oil of reference for fuel prices in the Dominican Republic. In October 2024, WTI was around US$69 per barrel, down from highs of over US$90 just a couple of months ago.
Freight rates are also down, after months of increases caused by events in the Middle East.
Read more in Spanish:
El Caribe
El Dia
5 November 2024