SANTO DOMINGO – The Central Bank clarified yesterday that the Dominican Republic “is not among the economies with the highest levels of inflation in Latin America.” “In fact, it ranks among the three countries with the least deviation from the center of its target range within the group of countries in the region that have adopted inflation targeting frameworks (continuous price increases),” it stated.
In a document released to the press in which it makes “clarifying points” about the recent dynamics of inflation in the international context, the governing body indicated “that a revealing fact that some political analysts have tried to ignore in their eagerness to undermine the efforts made to stabilize the behavior of domestic prices is that after Uruguay and Guatemala, the Dominican Republic is the country with the smallest deviation from the center of its inflation target range among all those that follow this monetary policy scheme in the region.”.
He explained that, when comparing year-on-year inflation from July 2021 to July 2022 in Latin America, "which is the appropriate period to monitor inflation in the countries," it is observed that the Dominican Republic's annualized inflation is below the median, which means that more than half of the countries in the region (10 out of 18) currently register an annualized variation of the Consumer Price Index (CPI) higher than that of Quisqueya.
He cited the cases of Venezuela, with an inflation rate of 137.1%, Argentina (71.0%), Chile (13.1%), Costa Rica (11.5%), Nicaragua (11.5%), Paraguay (11.1%), Honduras (10.9%), Colombia (10.2%), Brazil (10.1%) and Uruguay (9.6%).
It added that another factor facilitating the convergence of inflation to the target range of 4% ±1% in 2023 is the favorable performance of foreign exchange-generating activities, which has resulted in a cumulative appreciation of the peso of 7.9% so far this year.
The Central Bank cautioned that it would be wise to be cautious when commenting on a variable that is crucial to the effectiveness of monetary policy.
