Home CaribbeanDominican Republic Central Bank maintains rate at 8.50% for the second month

Central Bank maintains rate at 8.50% for the second month

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Central Bank maintains rate at 8.50% for the second month

For second month in a rowthe central bank of the Dominican Republic (BCRD) decided hold pause the increment cycle of your interest rate from monetary politics (TPM) to set it back to 8.50% per year.

With the decision, taken at its meeting of monetary politics of this December, the rate of the permanent liquidity expansion facility (1-day Repos) remains at 9.00% per annum and the rate of interest-bearing deposits (Overnight) continues at 8.00% per annum.

“This decision is based on a exhaustive evaluation of the recent behavior of the economy, especially of inflation”, the bank said today in a statement, to justify its decision.

“In that order,” he added, prices raw materials, particularly of the oilthey have moderate during the second semester of the year, at the time they have been reduced costs global container transport. At the domestic level, the inflationary dynamics has responded in recent months to the monetary restriction program and the measures implemented by the Government through subsidies for fuel, energy and support for agricultural production”.

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The increases come from last year

The BCRD has increased its rate of monetary politics in 550 basis points since November from last year.

“The opportune reaction has contributed to the fact that the interest rate real interbank rate, that is, the difference between the nominal interbank rate and inflation expectations, is more than four percentage points above its estimated neutral level,” he said.

The MPR influences interbank rates. When it rises, it leads to an increase in interest rates gradually in the different types of credit and deposit products in the financial system, depending on whether they are contracted at a fixed or variable rate.

The BCRD recalled that in Latin Americaalmost all the central banks have increased its TPM, placing it above pre-pandemic levels, as is the case with Argentina (reference rate in 75.00%), Brazil (13.75%), Colombia (12.00%), Chile (11.25%), Uruguay (11.25%), Mexico (10.50%), Costa Rica (9.00%), Paraguay (8.50%), Peru (7.50%) , Nicaragua (7.00%) and Guatemala (3.75%).

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