Dominican Republic: Inflation in February drops to lowest level in over five years
March 12, 2015
In February, consumer prices rose 0.20% over the previous month, which contrasted the 0.19% drop recorded in January and marked the first increase in five months. According to the Central Bank, the decrease mainly reflected lower prices for housing as well as for food.
Headline inflation fell from 1.2% in January to 1.0% in February, which marked the lowest level since October 2009. Annual average inflation inched down from 2.9% in January to 2.7% in February 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 1 March, the Central Bank maintained its monetary policy rate at 6.25%, which followed a similar decision in February. 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