Dominican Republic

Dominican Republic Inflation September 2018

Dominican Republic: Inflation falls again in September

Consumer prices rose 0.08% in September over the prior month, up from August’s 0.03% rise. According to the Central Bank, as in the previous month September’s slight uptick was driven by higher prices for education, transport and housing, which were largely offset by lower prices for food and non-alcoholic beverages.

Inflation declined from 3.9% in August to 3.3% in September, moving further below the midpoint of the Central Bank’s inflation target range of 3.0%–5.0%. Core inflation, which excludes volatile items such as certain types of food, fuel and administered prices, came in at 2.5%.

its 28 September monetary policy meeting, the Central Bank kept its main policy rate at 5.50%, after hiking rates for the first time in a year in July. The Bank’s decision came in the context of a moderating price pressures in recent months, and subdued core inflation. Moreover, international reserves have risen notably since June, supported by currency inflows from tourism, FDI, remittances and good exports. This has lessened the pressure on the Bank to continue tightening its stance.

The communiqué was markedly less hawkish than in the previous meeting, when the Bank explicitly stated it was prepared to continue increasing rates in response to tighter U.S. monetary policy. In September; the Bank readopted a neutral bias, stating it would closely monitor international and domestic developments going forward to ensure price stability.

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