Monetary Policy Rate Begins 2020 at 4.5%

Arguing that for this year inflation is expected to remain around the central value of the target range, the Central Bank of the Dominican Republic decided to set the Monetary Policy Rate at 4.5%.

Tuesday, February 4, 2020

From the BCRD's press release:

January 31st, 2020. In its monetary policy meeting of January 2020, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy rate at 4.50% per annum.

The decision on the reference rate is based on the detailed analysis of the risks balance regarding the inflation forecasts, including international and domestic macroeconomic indicators, the market expectations and the projections in the medium term. The monthly inflation of December was of 0.20%, while the inter-annual inflation to the closing of 2019, was at 3.66%, below the center of the target of 4.0% ± 1.0%. The subjacent inflation, that reflects the monetary conditions, was at 2.25% in December. Forward, the inflation expectations of the economic analysts as well as the forecast system of the BCRD, point out that the inflation would remain around the central value of the target range during 2020.

In the international environment, there are still factors of uncertainty, associated with socio-political tensions in several regions of the world and trade disputes between the major economies, which have led to a slowdown in the global economy. More recently, there has been increased volatility in international financial markets as a result of the potential impact that the coronavirus could generate on the Chinese economy and on world growth. Indeed, the International Monetary Fund (IMF) estimates that the global economy will grow by 2.9 % in 2019, the lowest rate in a decade, and will recover slightly to 3.3 % in 2020. On the other hand, Consensus Forecasts, which groups together the main firms of analysts that make projections at international level, maintains the forecast of a moderate world growth of 2.5% for 2019 and 2020.



More on this topic

Monetary Policy Rate Closed 2019 at 4.5%

January 2020

After the Central Bank of the Dominican Republic decided to lower the monetary policy rate to 4.5% at the end of August last year, it decided on December 27 to keep it unchanged, arguing that inflation continues in the projected ranges.

From the Central Bank of the Dominican Republic's press release:

Fixed at 4.5% Monetary Policy Rate

November 2019

After the Central Bank of the Dominican Republic decided at the end of August to lower the monetary policy rate to 4.5%, on October 31 it decided to keep it unchanged, arguing that inflation continues in the projected ranges.

From the Central Bank of the Dominican Republic:

Monetary Policy Rate Stays at 4.5%

October 2019

After the Central Bank of the Dominican Republic decided at the end of August to lower the monetary policy rate to 4.5%, on September 30 it decided to keep it unchanged, arguing that inflation has remained in the projected ranges.

From the Central Bank statement:

Santo Domingo, September 30, 2019. In its monetary policy meeting of September 2019, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy interest rate at 4.50% annually.

Monetary Policy Rate Drops to 4.5%

September 2019

After the Central Bank of the Dominican Republic decided at the end of July to lower the monetary policy rate to 4.75%, on August 30 it decided to reduce it again, in this case to 4.5%.

The decision on the reference rate is based on market expectations and medium-term projections.

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