Dominican Republic: Inflation drops in December
January 14, 2015
In December, consumer prices fell 0.70% over the previous month, which followed the 0.14% drop recorded in November. The figure marked the steepest decrease since December 2008. According to the Central Bank, the decrease mainly reflected lower prices for housing as well as for transport.
Annual headline inflation fell from 2.7% in November to 1.6% in December, which marked the lowest level since October 2009. Annual average inflation edged down from 3.2% in November to 3.0% in December and now sits at its lowest rate in nearly five years. As a result, headline inflation closed the year well below the lower bound of Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its 4.5% target rate.
At its meeting on 31 December, the Central Bank maintained its monetary policy rate at 6.25%, which followed a similar decision in November. The Bank decided to keep its rate on hold, taking into consideration the latest economic developments in the developed economies as well as subdued inflationary pressure on the domestic front.
Author: Dirina Mançellari, Senior Economist