The Central Bank of the Dominican Republic raised the monetary policy interest rate

DOMINICAN REPUBLIC - In Brief 24 Nov 2021 by Magdalena Lizardo

Given the persistence of inflationary pressures beyond what was expected, the Central Bank today decided to raise the monetary policy rate from 3% to 3.5%, annually. With the decision, the interest rate of the permanent liquidity expansion facility (1-day Repos) also increases from 3.5% to 4.0%, while the remunerated deposit rate (Overnight) increases from 2.5% per year to 3.0% per year. This is a new decision in the direction of returning monetary policy to normal. Last August, the Central Bank began a gradual process of normalization of monetary policy with the orderly withdrawal of the resources granted during the pandemic.Accumulated inflation as of October 2021 was 6.56% and the Central Bank expects it to converge to the target range of 4 ± 1 in the second half of 2022, while the accumulated year-on-year growth of economic activity was 10.6% as of September 2021.

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