Dominican Republic: Inflation drops to lowest level in over five years
February 13, 2015
In January, consumer prices fell 0.19% over the previous month, which followed the 0.70% drop recorded in December. December’s figure had 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 1.6% in December to 1.2% in January, which marked the lowest level since October 2009. Annual average inflation inched down from 3.0% in December to 2.9% in January and now sits at its lowest rate in nearly five years. As a result, headline inflation remains well below the lower bound of the Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its 4.5% target rate.
At its meeting on 30 January, 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