Dominican Republic Monetary Policy January 2020

Dominican Republic

Dominican Republic: Central Bank leaves rates unchanged in January on encouraging growth and inflation metrics

January 31, 2020

At its January monetary policy meeting, the Central Bank (BCRD) left the policy rate unchanged at 4.50% for the fifth straight month, following 100 basis points of easing in June–August to boost economic activity.

The decision to stay put was underpinned by solid domestic activity and inflation which has returned to the Bank’s 3.0%–5.0% target range. Moreover, the BCRD expects inflation to remain close to the center of the target range this year. As such, further easing was not required.

In its communiqué, the Bank’s left its dovish guidance unchanged. The BCRD stated it would be alert to “moderating global economic activity as well as internal and external uncertainty, and the impact on demand”. In addition, the Bank mentioned the potential impact that the coronavirus could have on the world economy. As such, although the Consensus sees rates remaining steady this year, further loosening should not be ruled out in the near-term.

Our panel currently forecasts the Central Bank’s main policy rate ending 2020 at 4.50% and 2021 at 4.63%.

Author:, Economist

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Dominican Republic Monetary Policy Chart

Dominican Republic Monetary Policy January 20 20

Note: Central Bank policy rate in %.
Source: Dominican Republic Central Bank.

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