Banco Central de la República Dominicana on Aug. 30 cut its monetary policy interest rate by another 25 basis points to 4.50% as inflation remained below the bank's target range.
The decision marks the third consecutive rate cut by the central bank, which reduced the rate by 50 basis points in June and by a further 25 basis points in July.
In its press release, the central bank said annual inflation in the country was 1.40% in July, representing the ninth straight month where it was below the target range of 3% to 5%.
The bank said its relaxation of monetary policy has "begun to boost private credit," but noted that external risks, particularly those related to trade tensions, continue to cloud the Dominican Republic's growth outlook.
"The uncertainty factors that have been gravitating in the international environment have been accentuated, particularly those related to trade disputes, as well as geopolitical risks," the bank said.
It said the local economy grew 4.7% from January to July, adding that if this recovery continues, GDP growth could reach close to its full potential by the end of 2019.
A number of central banks in Latin America, including the region's two largest economies of Brazil and Mexico, have lowered borrowing costs in 2019 amid growth and inflation concerns.
