The Central Bank of the Dominican Republic (BCRD) announced on Monday that it had decided to boost its monetary policy rate of interest by 25 basis points, or from 8.25% to eight.50%, at its most up-to-date meeting, which corresponds to the month of October. In line with a press release from the Central Bank, while the annual rate for the everlasting liquidity expansion facility (1-day Repos) rises from 8.75 percent to 9.00 percent and the annual rate for interest-bearing overnight deposits rises from 7.75% to eight.00%,
In a press release, the Central Bank stated that the selection was made after a radical evaluation of the economy’s percentage behavior, particularly the definition of inflationary pressures. The worth of raw materials, especially food and oil, has recently moderated, as has the associated fee of shipping containers globally, in line with the Central Bank. Nevertheless, to the extent that the pace of economic activity is maintained, internal demand pressures and the second-round effects of those external components have had an impact on domestic inflation.
Yr-over-year inflation is anticipated to proceed slowing within the upcoming months in consequence of the timely starting of the strategy of raising the monetary policy rate in November of last yr. In consequence, the transmission mechanisms for the monetary policy have been working effectively. The reference rate of interest has reached the extent vital for inflation to converge to the goal range of 4% 1% before the top of the second quarter of next yr with this increase of 25 basis points, in line with the Central Bank’s note.