Thursday, June 8, 2023

Héctor Valdez Albizu forecasts inflation will enter the target range of +/-4% this month

The governor of central bank (BCRD), Héctor Valdez Albizu, revealed that, according to the latest estimates, the inflation it would enter the target range of 4% ± 1% at the end of May, earlier than expected.

As published by the newspaper el Dinero, Valdez Albizu points out that this achievement would grant the necessary spaces for the Central Bank to adopt timely measures that contribute to relaunching (economic) growth during the rest of the year, preserving macroeconomic stability.

When participating, deliver a speech before the Association of Industrialists of the Northern Region (Airen), said that during the last six months the Central Bank has paused in the adjustments to its interest rate of reference, since the monetary policy transmission mechanism has been successful in moderating the inflationary pressures.

“In this way, the monetary measures, together with the subsidies applied by the Government, have contributed to a reduction of 449 basic points in year-on-year inflation, going from a maximum of 9.64% in April 2022 to 5.15% in April 2022. 2023”, he maintained.

Regarding the rate of monetary politics, explained increased gradually by 550 basis points, going from 3.00% to 8.50% annually between November 2021 and October 2022. As a result, he said, interest rates have been adjusted upwards, while monetary aggregates have slowed down significantly.

He indicated that, specifically, the growth rate of the circulating medium (M1) went from a maximum of 30% year-on-year during 2021 to 8.5% in April 2023, while the expanded money supply (M2) and money in a broad sense (M3 ) expand by 9.7% and 8.0%, respectively, consistent with the variation in nominal GDP and with what is contemplated in the Monetary Program.


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