Increase in monetary policy rate stokes concern

Santo Domingo – Economists believe that the Central Bank’s decision to increase its monetary policy interest rate again, now by 50 basis points, going from 5.00 to 5.50% per year, will have a significant impact on the country’s economic activity.

Meanwhile, the Association of Multiple Banks of the Dominican Republic (ABA) has already announced that “it definitely has a transmission channel at bank rates,” such as that of new loans.

“As long as we have an expansive fiscal policy in terms of public spending, understood as current expenses higher than current income, the Central Bank has no other alternative to contain inflationary pressure than to increase the interest rate,” said Guillermo Caram, former governor of the Central Bank.