Dominican Republic Monetary Policy December 2019

Dominican Republic

Dominican Republic: Central Bank stays put in December amid improving growth and inflation metrics

December 27, 2019

At its 27 December monetary policy meeting, the Central Bank (BCRD) left the policy rate unchanged at 4.50% for the fourth straight month, following 100 basis points of easing in June–August to boost economic activity.

The Bank’s decision to keep rates unchanged was driven by the recent rebound in economic growth and a recovery in inflation—which moved back to the target range in November for the first time in over one year. Moreover, international uncertainty has lessened following the announcement of a trade deal between the U.S. and China. As a result, further cuts were not necessary.

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”. This suggests further loosening should not be ruled out in the near-term. That said, the Consensus is for rates to remain steady next year.

Our panel currently sees the Central Bank’s main policy rate ending 2020 at 4.50% and 2021 at 4.75%.

Author:, Economist

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Dominican Republic Monetary Policy Chart

Dominican Republic Monetary Policy December 2019 1

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

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