Wednesday, February 28, 2018

Dominican Republic holds rate, raises growth forecast

       The Central Bank of the Dominican Republic (BCRD) kept its monetary policy rate at 5.25 percent, confirming it still expects inflation to remain within its target range over the next 24 months.
       BCRD also reiterated its view from recent months that the economy was continuing to react favorably to its monetary easing measures and raised its growth forecast for this year to between 5.5 and 6.0 percent from around 5.5 percent, which was forecast in the monetary program for 2018.
       The central bank added preliminary data from the monthly indicator of economic activity (IMAE) showed annual growth of 7.0 percent in January, with credit to the private sector up by around 12 percent year-on-year.
       The Gross Domestic Product of the Dominican Republic grew by an annual rate of 6.5 percent in the fourth quarter of 2017, up from 3.0 percent in the third quarter.
        Last year the economy's growth momentum picked up following a 50 basis point rate cut on July 31 and a lowering of the legal reserve ratio by 2.2 percentage points.
        In January the International Monetary Fund forecast 5.5 percent growth this year, supported by reinvigorated credit growth and benign external conditions, with growth remaining around the potential level of 5.0 percent in the medium term.
        Inflation eased to 3.86 percent in January from 4.2 percent in December, slightly below the central value of the BCRD's target range of 4.0 percent, plus/minus 1 percentage point.
        The IMF said the central bank's inflation-targeting framework was delivering good results and the current neutral monetary policy stance was appropriate.


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