- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.75%
The Central Bank of the Dominican Republic (BCRD) left its policy rate unchanged at 5.75 % at the January 2025 monetary policy meeting, maintaining the overnight repo and deposit rates at 6.25 % and 4.50 %, respectively, as external rate uncertainty persists while domestic inflation stays within the 4 % ± 1 % target and credit growth aligns with nominal GDP. The corridor is supported by ample liquidity after repo tenors were lengthened to 28 days, reserve-requirement resources of DOP 35.4 bn were released, some DOP 140 bn of BCRD bills matured in Q4 2024, and a DOP 68 bn rapid-liquidity facility was extended for a year. Headline inflation eased to 3.35 % in December and core to 4.01 %, with BCRD models projecting both measures to remain on target through 2025; real GDP expanded 5.0 % in 2024 and is expected to grow 4.5–5.0 % this year, while private-sector credit in local currency is rising about 10 % year on year. On the external side, foreign-exchange receipts reached USD 43.5 bn in 2024, international reserves stood near USD 13.4 bn (roughly five months of imports) and the peso depreciated 4.6 % in January. The statement notes resilient US growth, a mild Euro-area expansion, diverging Latin American rate cycles, moderate oil prices near USD 74 per barrel and elevated gold prices amid geopolitical tensions. The central bank will keep monitoring conditions and stands ready to act to preserve macroeconomic stability and keep inflation within the target range.
Rate evolution
After holding the policy rate in May 2025, the Central Bank of the Dominican Republic kept it unchanged through August before easing in September and October, lowering it by 50 basis points to 5.25%, and then pausing in December. The pauses reflected persistent global uncertainty, restrictive external financial conditions, elevated United States rates, geopolitical tensions and oil-price volatility, even as headline inflation was 3.71% and core inflation 4.13% in April 2025 and forecasts kept both measures within the 4.0% ± 1.0% target range through 2026. As some external uncertainty eased and conditions became less restrictive, the Central Bank of the Dominican Republic turned to easing to support domestic demand amid weaker activity, especially in construction and manufacturing, while continuing to manage liquidity actively and reinforcing transmission through DOP 81 billion of liquidity provision and macroprudential measures.
The policy rate was then kept at 5.25% in January and February 2026 as inflation rose but stayed within target, with the Central Bank of the Dominican Republic judging the pressures to reflect mainly food supply shocks linked to external factors and climate events. It maintained the policy rate at 5.25% from March through August, initially citing the Middle East conflict, oil-related supply pressures, recovering activity and inflation expectations anchored to target, and later pointing to stronger domestic activity and persistent global uncertainty from the conflict and higher international oil prices. Annual inflation rose from 4.63% in March to 5.67% in June before moderating to 5.47% in July, while core inflation stood at 4.96%, with forecasts showing inflation returning to the 4.0% ± 1.0% target range in the fourth quarter as the Central Bank of the Dominican Republic managed liquidity to support stable bank rates, local-currency private credit grew around 8% year on year and the monthly economic activity indicator expanded 4.6% in July.