Limited Room To Address Higher Inflation

Consumer price inflation in the Dominican Republic has been picking up in recent months, suggesting that higher fuel costs are beginning to weigh on the consumer price basket. We believe that while monetary policy will unlikely become overly hawkish in the months ahead, the government may look to ease the burden of higher fuel prices. That said, with a new IMF Stand-By facility in place and the fiscal position looking weak, room to manoeuvre is firmly limited.

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