Wednesday, August 31, 2016

Dominican Rep. holds rate, inflation seen nearing target

    The Central Bank of the Dominican Republic (CBDR) kept its monetary policy interest rate at 5.0 percent, saying inflation is forecast to converge to its target of 4.0 percent, plus/minus 1 percentage point, within the policy horizon.
    The CBRD, which has maintained its rate since July 2015, noted that inflation in July eased to 1.85 percent from June's 1.91 percent while underlying, accumulated inflation in the period from January through July was 1.67 percent compared with consumer price inflation of 0.36 percent.
     The economy of the Dominican Republic is continuing to show a trend trend - growing by 7.4 percent in the first six months - with 2016 growth projections around 7.0 percent, the highest level of economic growth in Latin America for the third year in a row.
    Credit to the private sector in domestic currency was up by 11.5 percent in the first half while the current account was positive in the first half and should end the year with a small deficit between 1.7 and 1.9 percent of Gross Domestic Product.
    Under these conditions, the central bank said it expects an increase in international reserves and relative stability in the exchange rate.
    The Dominican peso has been slowly depreciating against the U.S. dollar for years and was trading at 46.15 to the U.S. dollar today, down 1.3 percent this year.


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