Dominican Republic: Inflation picks up in May
June 11, 2015
In May, consumer prices rose 0.29% over the previous month, which contrasted the 0.25% drop observed in April. According to the Central Bank, the increase mainly reflected higher prices for transportation and housing.
Inflation increased from a flat reading in April to 0.3% in May. April’s reading had marked the lowest reading since October 2009. Annual average inflation edged down from 2.2% in April to 1.9% in May and now sits at its lowest rate since January 2010. As a result, headline inflation remains well below the lower bound of the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target rate.
At its meeting on 31 May, the Central Bank decided to reduce its monetary policy rate by 0.25 percentage points from 5.25% to 5.00%. This was the third consecutive meeting in which the Bank 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