- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.75%
The Central Bank of the Dominican Republic (BCRD) kept its policy rate at 5.75 % at the March 2025 meeting, citing softer private-sector credit and domestic demand alongside fifteen consecutive months of inflation within the 4 % ± 1 % target band despite heightened global uncertainty and a stronger USD. Following a cumulative 125 bp rate cut in the second half of 2024, the policy rate has remained unchanged at 5.75 % throughout 2025. The overnight deposit rate stays at 4.50 % and the one-day repo facility at 6.25 %, with the BCRD continuing active liquidity management to limit exchange-rate volatility. Headline inflation eased to 3.56 % in February while core inflation was 4.21 %; the bank’s forecasts keep both measures inside target through 2026. Output grew 2.2 % y/y in January and peso-denominated credit growth slowed to about 8 % in March. Solid foreign-currency inflows from exports, remittances and FDI underpin reserves of USD 14.7 bn (≈11 % of GDP, five months of imports) and contained the peso’s 6.6 % y/y depreciation. Globally, elevated US rates, a firming dollar, subdued euro-area activity and geopolitical tensions weighing on commodities framed the decision. The central bank pledged ongoing vigilance and readiness to act to preserve macroeconomic and price stability.
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.