The Central Bank increases its key rate to 5.50%

Santo Domingo, July 26 – The Central Bank today raised its monetary policy rate to 5.50% per annum after an "overall analysis" of the balance of risks around the projections of the current fiscal year. inflation, the main national macroeconomic indicators and the relevant international environment.

The measure also obeys, according to the agency, market expectations and medium-term forecasts. The previous rate was 5.25%, which remained unchanged just last year.

During the first half, the bank claimed that the accumulated inflation was 1.43%, so that year-on-year inflation in June From 2017 to June 2018, it was 4 , 63%, above the mid-point of the target range of 4.0% ± 1.0% established in the monetary program.

For the local central bank, these figures are lower than the inflation forecast, which indicated a gradual upward trend, due to rising oil prices, domestic demand pressures and inflation. 39, increased uncertainty in international financial markets.

According to the Bank's short-term liquidity management system, the rate of deposits paid increases from 3.75% to 4.00% per annum and the rate of permanent expansion of facilities increases by 6.75%. % at 7.00% per year.

The institution pointed out, in a statement, that in the external environment, there is a tendency to

"The United States would continue to lead the industrialized countries with an economy that operates in full employment and with growth projections of 2.9% in 2018 and 2.6% in 2019, "he added

in that order, the bank claims that the second fastest growing economy is euro zone (ZE), whose real product would increase by 2.2% and 1.8% in 2018 and 2019, respectively

In addition, India would increase by 7.3% in 2018 and by 7.5% in 2019, while China would increase by 6.6% and 6.4% during those years.

In Latin America, all economies, with the exception of Venezuela, would show growth this year.

"Latin America would increase 2.0% in 2018 and 2.5% in 2019, according to consensus predictions.It should be noted that this growth would occur despite the moderation seen in some major economies. such as Argentina and Brazil, "said the Central Bank.

Regarding the performance of the local economy, the Central Bank says that it continues to evolve "favorably", since the monthly indicator of economic activity (IMAE) recorded a cumulative growth of 6.6% over the period January-May 2018.

"In this way", explains the agency, "the trend The IMAE cycle grows at an annual rate of 6.9% in May, projecting that the economy would continue to grow above its potential throughout the year. "

To the extent that this growth trajectory is maintained and generating pressure on future domestic prices, monetary policy would continue to move towards the withdrawal of monetary stimulus measures launched last year, the institution said.

Last week, the Central Bank He brought liquidity to the foreign exchange market because of the scarcity of dollars that the agency attributes to the growth of the Dominican economy and rising prices international oil companies.

The bank said last Thursday the treasure of the country was entering the country's coffers. $ 1,300 million of sovereign bonds that the government has placed in the international market, with which reserves reached $ 7,700 million. [EFE]