Dominican Republic: Central Bank keeps rates unchanged in April
April 30, 2020
its end-April meeting, the Central Bank (BCRD) left its monetary stance unchanged, after substantial easing in March to combat the Covid-19 fallout.
The BCRD appeared to be in wait-and-see mode following its recent easing, which included rate cuts and an over USD 2 billion liquidity injection, as monthly inflation and GDP data does not yet reflect the impact of the measures. Moreover, pressure on the peso, which has now depreciated 3.7% against the dollar since the start of the year, likely provided further motivation to avoid extra rate cuts.
In its communiqué, the Bank remained dovish, stating it would continue to monitor the impact of coronavirus on growth and was prepared to react if needed. As such, further monetary easing, either in the form of rate cuts or a boost to liquidity, is possible going forwards.
Author: Oliver Reynolds, Economist