After its monthly meeting, the Central Bank of the Dominican Republic decided to maintain its base interest rate at 5.25 percent.
“The decision on the reference rate was adopted after an exhaustive analysis of the balance of risks around the inflation forecasts, the evolution of the main national macroeconomic indicators, the international environment relevant to the Dominican economy, market expectations and the medium-term predictions of that set of variables,” explained the Bank in a press release.
Year-on-year inflation in October was 3.48 percent, well within the Bank’s target of ±4 percent. Inflation in October was 0.0 percent.
The economy is expected to continue to grow at a robust pace. In its “World Economic Outlook: October 2017,” the International Monetary Fund expects the Dominican Republic to register high rates of growth: 4.8 percent in 2017, 5.8 in 2018, and 5.0 in 2019.
The Bank acknowledges that Hurricanes Irma and Maria damaged the nation, but that monetary policy adopted in the summer aided in the Dominican Republic‘s recovery.
“Note that the reduction of TPM 50 basis points, with decreased reserve requirements by 2.2 percentage points in July, have had a major multiplier effect on private sector credit in national currency,” the Bank points out. “Since these measures were adopted, private loans in national currency have grown by more than RD $ 41,000 million, for an average higher than RD $ 10 billion per month, almost three times more than the average monthly growth of the first half of the year.”
We hope you enjoyed this article! You can support El Hemisferio by becoming a member of our Patreon.