Central Bank Reports Inflation Continues To Ease

• The Central Bank of the Dominican Republic (BCRD) reports that the consumer price index (CPI) for July registered a variation of 0.50%, less than the 0.64% recorded in June.
• Notably, the year-on-year inflation continues to gradually yield, reaching 9.43% as of July 2022. This is equivalent to a reduction of 0.21pp relative to the maximum rate registered this year, which was 9.64% in April.
• The BCRD indicated that the positive evolution of foreign exchange-generating activities has favoured the exchange rate’s relative stability, which has partially helped offset the impact of the imported component on prices.
• However, measures implemented by the Government, particularly the fuel subsidy in the local market and the reversal of the increase in the electricity rate scheduled for the July-September 2022 quarter, have mitigated the rate of price growth and contributed to the lower inflation in July.
• Furthermore, given the global economic environment, the Central Bank has adopted measures to contribute to the convergence of headline inflation to the target range of 4.0% to 1.0% throughout the policy horizon. In this regard, the monetary policy interest rate was raised by 50 basis points at the end of July 2022, from 7.25% to 7.75% per year.

(Source: Dominican Today)