SANTO DOMINGO.- Julio Lozano, Director of Economic Studies at the Dominican Republic's Association of Multiple Banks (ABA), believes the Dominican economy will take a positive turn in 2023, driven by the downward trend in the Monetary Policy Rate (MPR), which will allow for better performance of the financial system.
The economist assures that, despite international organizations predicting a "very weak outlook", "the Dominican engine will continue to thrive".
Lozano shared the Central Bank's projections, updated to October 2022, regarding the Monetary Policy Rate (MPR), which would increase by 10 basis points in the remaining 17 days of 2022, and further decreases are expected thereafter.
The specialist shared his analysis during a meeting with journalists from the economic field, to whom he presented the projections and expectations of the actors in the multiple banking sector for 2023, a year marked by "uncertainty" among economic actors, he said.
TPM Statistics
Lozano indicated that by the end of December, the interest rate would rise from 8.50% to 8.60% annually. However, monetary policy is expected to begin easing in 2023 with a one percentage point decrease by October of that year, bringing the rate to 7.60% %.
The monetary authority's analysis goes one year further ahead, indicating that the rate would fall below 7.0% by the same month in 2024; the decrease would be 1.3%. In that scenario, the Monetary Policy Rate (MPR) would be at 6.3%, according to the presented chart.
Since November 2021, the Central Bank began to implement restrictive measures in its monetary policy, increasing the rate each month in order to contain the margins of inflation, which were subsequently pressured by the armed conflict between Russia and Ukraine, a war that began in February of this year.
By November 2021 the rate was 3.50% and a year after the monthly adjustments it is at 8.50%.
Source: Diario Libre with modifications.
