Dominican Republic: Central Bank raises policy rate for second consecutive meeting
March 23, 2011
In February, consumer prices increased 1.20% over the previous month. The monthly increase reflected higher prices for transport, as well as for food, alcoholic beverages and tobacco. The reading was slightly below the 1.24% rise recorded in January but considerably above the 0.14% increase recorded in February 2010. Accordingly, annual headline inflation jumped to 7.3% from 6.2% in January. At the current level, inflation sits above the upper limit of the 5.0%-6.0% target range set by the Central Bank for 2011 for a third consecutive month. As a consequence, at its most recent meeting on 1 April, the Bank decided to raise the monetary policy rate by 25 basis points to 6.25%. The decision marked the second tightening move since the beginning of 2010, following on a 100 basis points hike in February.
Author: Armando Ciccarelli, Head of Data Solutions