Dominican Republic: Inflation eases further in March
April 15, 2015
In March, consumer prices rose 0.14% over the previous month, which was below the 0.20% increase observed in February. According to the Central Bank, the increase mainly reflected higher prices for housing as well as for food.
Headline inflation fell from 1.0% in February to 0.6% in March, which marked the lowest level since October 2009. Annual average inflation inched down from 2.7% in February to 2.5% in March and now sits at its lowest rate in 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 4.0% target rate.
At its meeting on 30 March, the Central Bank decided to reduce its monetary policy rate by 0.5 percentage points from 6.25% to 5.75%. This was the first meeting since August 2013 in which the Bank decided to cut its monetary policy rate, taking into consideration subdued inflationary pressures on the domestic front and the latest economic developments in the developed economies.
Author: Dirina Mançellari, Senior Economist