Dominican Republic Policy Rate Unchanged

• The Central Bank left the target policy rate unchanged at 3%, while the 1d repo rate and the overnight rate remained at 3.5% and 2.5%, respectively. The CB reiterated its view that inflationary pressures are largely due to temporary global supply shocks resulting in spikes of oil and other commodity prices, as well as logistical issues such as scarcity of shipping containers. 
• On the domestic front, beef prices have also fueled inflation. The authorities still expect inflation to converge towards the target range of 4.0% +or- 1.0% by mid-2022. In the meantime, the CB is gradually withdrawing the liquidity programs introduced during the pandemic. 
• The Bank indicated that economic activity expanded by 12.7% during the first nine months of the year, and that GDP is likely to expand by more than 10% in 2021. 
• It also acknowledged that domestic demand is recovering on the back of the various stimulus programs and the successful vaccination campaign, with strong performance of construction, local manufacturing, commercial activities, and free zones.

(Source: Oppenheimer)