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