SANTODOMINGO- The Central Bank of the Dominican Republic (BCRD), in its monetary policy meeting of February2023 , decided to keep its monetary policy interest rate (TPM) unchanged at 8.50% per year.
Likewise, the rate of the permanent liquidity expansion facility (1-day Repos) remains at 9.00% per annum and the rate of remunerated deposits (Overnight) continues at 8.00% per annum.
"This decision is based on a thorough assessment of recent economic performance, particularly inflation. International prices for most commodities, especially oil and food, have recently been moderating, while global container shipping costs continue their downward trend," the regulatory body said in a press release.
He explained that at the domestic level, the inflationary dynamic continues to respond favorably to the monetary restriction program and the subsidies implemented by the Government.
In that context, the Central Bank added, "the monthly variation of the consumer price index (CPI) was 0.63% in January; while year-on-year inflation stood at 7.24%, showing a reduction of about 240 basis points from the peak of 9.64% in April 2022. Meanwhile, core inflation, which excludes the most volatile components of the basket and reflects monetary conditions, has decreased from 7.29% in May of last year to 6.60% in January 2023.".
"The timely monetary response has facilitated a significant increase in the nominal interbank interest rate and a decrease in inflation expectations, causing the real interbank rate to be about five percentage points above its estimated neutral level, which helps to mitigate domestic demand pressures," the Central Bank indicates.
In addition, "monetary aggregates have slowed, especially the money supply (M1), which, after growing at a maximum of 30% year-on-year during 2021, expanded below 10% in February 2023, lower than the growth of nominal gross domestic product (GDP).".
