Dominican Republic: Inflation moderates in August but Central Bank hikes rate
September 9, 2013
In August, consumer prices jumped 0.66% over the previous month, according to preliminary Central Bank data. The reading came in slightly above the 0.62% increase seen in July and marks the highest rise since the beginning of the year.
Annual headline inflation fell from 5.7% in July to 5.3% in August. Inflation is currently within the Central Bank's tolerance margin of plus/minus 1.0 percentage points around its 5.0% target.
Meanwhile, the Central Bank increased the monetary policy rate a substantial 200 basis points to 6.25% at its 28 August meeting. The Central Bank decided to increase its monetary policy rate to support a weakening currency and to withstand inflationary pressures.
FocusEconomics Consensus Forecast participants expect inflation to end the year at 4.9%, which is up 0.1 percentage points over last month's projection. By the end of 2014, panelists expect inflation to moderate to 4.4%.