Economy September 1, 2020 | 9:06 am

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Economy shrunk around 8.5% in July: Central Bank

Santo Domingo.- The Central Bank of the Dominican Republic ordered a 50 basis point reduction in its monetary policy interest rate, from 3.50% to 3.00% per year, while reporting that, according to preliminary data, the economy would have fallen around 8.5% in July.

In addition, it narrowed the interest rate corridor, by reducing the interest rate of the permanent liquidity expansion facility (1-day Repos) from 4.50% to 3.50% per annum, while the interest rate of paid deposits (overnight) remains at 2.50% annually. “In this way, the corridor of the permanent liquidity facilities of the Central Bank will have a range of ± 50 basis points with respect to the monetary policy rate.”

The decision on the benchmark rate is based on a comprehensive analysis of the impact of the COVID-19 pandemic on economic activity and future inflation trends. “In particular, the monthly variation of the Consumer Price Index in July was 1.88%, while the accumulated inflation during the first seven months of the year was 2.32%.”

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