Dominican Republic: Inflation eases further in June
July 12, 2012
In June, consumer prices rose 0.21% over the previous month, contrasting the 0.27% drop seen in May. The reading was driven by a pick-up in prices for food and non-alcoholic beverages as well as for alcoholic beverages and tobacco. Despite the monthly increase, annual headline inflation dropped from 3.5% in May to 2.7% in June, which marks the lowest rate since October 2009. At the current level, inflation sits well below the Central Bank's target of 5.5% with a 1.0 percentage point tolerance margin set in the Monetary Policy Program for 2012. Building on the favourable inflation scenario, at its 28 June meeting the Central Bank left the monetary policy rate unchanged at 6.00%, following a 0.75 percentage-point cut in May. The Central Bank does not see a pick-up in inflationary pressures in the medium term and expects that inflation will remain in the lower part of the tolerance range around the target for the rest of the year.
Author: Armando Ciccarelli, Head of Data Solutions