The depreciation of the dollar could change the monetary policy of the central banks, according to analysts who observe divergences in recent decisions. In Madrid, experts highlight how the weakness of the US currency and the volatility of raw materials pressure entities such as the European Central Bank (ECB).
Monetary policy of the ECB in the face of depreciation of the dollar
The ECB maintained the rates for the fifth consecutive month at 2%, with inflation projected to stabilize at that objective in the medium term. Christine Lagarde, its president, avoided firm commitments, depending on economic data. Analysts expected stability until 2026, but a stronger euro could force downward revisions. To adjust underlying inflation, the euro-dollar exchange rate should be around 1.22-1.25 dollars. Josefina Rodríguez of Vanguard warns of inflation risks below the objective, leaning towards monetary relaxation.
Divergences in other central banks
The Bank of England left rates at 3.75%, with inflation above 3%, opening the door to cuts. In contrast, the Reserve Bank of Australia raised 0.25 points to 3.85% for inflation at 3.80%, the first increase since November 2023. Canada (2.25%), Norway (4%), Sweden (1.75%), and India (5.25%) maintained positions, while Switzerland is at 0% after pioneering cuts in 2024, Japan at 0.75%, and China at 3% for main loans.
Monetary policy of the Fed with a new turn
In the US, Donald Trump nominated Kevin Warsh to replace Jerome Powell in May, intensifying debates over cuts. Sergio Ávila of IG notes that prudence in data would keep rates high, benefiting variable income if they fall. Pedro del Pozo of Mutualidad predicts the Fed less expansionary under Warsh, with slower declines. Historically, the depreciation of the dollar has forced adjustments, such as in 2022 when the Fed aggressively raised rates in response to post-pandemic inflation, reaching 5.25-5.50% before pauses.
Global context and implications
- Volatile inflation: Unstable raw materials amplify the effects of the depreciation of the dollar.
- Experts agree: changes in monetary policy depend on currencies and growth.
- In the Dominican Republic, this affects remittances and exports linked to the dollar.
This monetary policy divergence reflects global tensions. The depreciation of the dollar remains a key factor for future decisions of central banks, with volatility that could accelerate cuts or increases according to incoming data.
