Central Bank prime rate falls to 4.25%, first cut since August
Santo Domingo. – The Central Bank on Sunday cut its Monetary Policy (TPM) rate from 5% to 4.25%, or 75 base points, the first reduction since August 2012.
The announcement forms part of the Monetary Board’s (JM) measures aimed at expanding liquidity in recent weeks, based on weak local demand but amid an economy not pressured by inflation.
On the decision to lower the TPM, the Board also cited a local output below potential, and U.S., Eurozone and Latin America growth forecasts, all revised downwards in May.
“This would indicate further weakness in the global economy and a decline in external inflationary pressures,” the Board said, adding that exports will jump on increase in mining exports.
It said imports of goods and services have been reduced, which led to an improved balance of payments by yearend.
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