At its monetary policy meeting in March 2121, the Central Bank of the Dominican Republic (BCRD) decided to increase its interest rate on monetary policy by 3.00% per annum. In this mode, the rate of the permanent liquidity expansion facility (Repos to 1 day) is fixed at 3.50% annually and the rate of remunerated deposits (Oornag) at 2.50% annually.
The decision on the reference case is based on the exhaustive analysis of the impact of COVID-19 on economic activity and the future evolution of inflation.
In particular, the monthly variation of the consumer price index (IPC) in December was 0.48%, while inter-annual inflation is linked to the analytical series of the new referential base (October 2019 – September 2020), which is the most Relevant to monetary policy decisions, the figure for the year 2020 is 4.63%, provided that there is within the target range of 4.0% ± 1.0%. Assimilation, high inflation, which excludes the most volatile components of the basics, is expected to rise to 4.77% by 2020.
Cabe states that, consistent with international line rates, inter-official inflation, as a result of increasing the new IPC base with the published publications of goods and services prior (base December 2010), 5.55% increase in December 2020 .
The recent dynamics of inflation have been influenced by cost shocks that have affected the supply of food as a result of climatic phenomena, in addition to the increase in imports and increases in the transport group.
It is important to note that the BCRD’s prognostic system indicates that inflation is calculated in the form of a transition from above the meta limit in the first half of 2021 to the temporary cost shocks, to a level converging to 4.0%. ± 1.0% during the rest of the year.
These inflation projections and the expectations of the economic agents ranked at the meta-level, together with the strength of the macroeconomic foundations, are the space for which the Central Bank maintains favorable monetary conditions with the proposal to continue reactive support., detached the entity in a press release.
International Entorno
In relation to prime materials, the price of the Texas Intermediate Petroleum (WTI) situation in US $ 52 dollars the barrel during January, recording a tendency to associate with a mayor asking for the prospects of global economic recovery . For another store, the price of the gold is elevated, offered at a cost of US $ 1800 dollars by our troy, to be used as a refuge of value in a context of high time, which benefited the Dominican Republic through the work of increment in the value of the exports of this metal.
In the domestic court, Preliminary figures from the Monthly Indicator of Economic Activity (IMAE) indicate that the reactivation process will continue, recording a variation of -1.0% interannually in December, a more favorable result than the initial projection of -1.5% mainly debit to a greater extent in the construction, local manufacturing and franc zones. This December report reflects that the economy is on the right track, with a significant increase of 28.8 percentage points with respect to the period observed in April (-29.8%), the most critical point of the crisis.