BC: economic and price stability will continue with the election cycle

SANTO DOMINGO. The Central Bank assured the economic agents that even in the middle of the election cycle price stabilization would continue as well as the continuation of macro-economic stability, creating a positive atmosphere that facilitates the decision making process of the private sector.

The entity said that it would continue to monitor the world and domestic economic evolution with the idea of reacting opportunely against the risks on price stability and the good working of the financial and payment systems of the country.

"The forecasts indicate a convergence of the inter-annual inflation with the goal during the first trimester of 2012, which indicates that even in the middle of an election cycle price stability and the continuity of the macro-economic policies will continue, creating an atmosphere of certainty that facilitates the decision making process by the private economic agents," said the Central Bank as it reported that its monetary policy is invariable.

The bank said that credit in the private sector continues expanding, indicating that the internal demand is conserving its growth. At the same time, the forecasts indicate a convergence of the inter-annual inflation with the goal during the first quarter of 2012.

The entity in its meeting on Monetary Policy on 31 January, decided to maintain the Tax Rate at 6.75% yearly and that the Lombard rate would continue at 9% yearly.

The bank explained that the decision with respect to the reference tax rate is backed by the fact that they do not see any detours from the projected inflation with respect to the goal and by the perspectives of the principal determinants of inflation.

For 2012, the Monetary Board, under the new scheme of explicit goals on inflation, approved a goal of 5.5% +/- 1% for this indicator. In December 2011, the monthly inflation was 0.1% and the inter-annual rate was 7.8%. Moreover, the underlying inter-annual inflation reached 5.2% at the close of the year.

The Central Bank refers to the fact that in the external context, both the IMF as well as the Consensus Forecast maintain their perspectives of moderation in the growth of the world economy. The projections point to the United States continuing on its road to recovery and Europe could be entering into a recession in 2012.