- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.75%
The Central Bank of the Dominican Republic (BCRD) kept its monetary policy rate at 5.75 % for April 2025, alongside an unchanged 1-day repo rate of 6.25 % and overnight deposit rate of 4.50 %, arguing that firm domestic demand and inflation near the 4 % ± 1 % target outweigh the drag from elevated global uncertainty and higher US rates. After cutting the policy rate by a cumulative 125 bp in the second half of 2024, the BCRD has since paused its easing cycle. Liquidity remains ample thanks to earlier macro-prudential and liquidity-support measures, with private-sector credit growth moderating to about 8 % y/y in April. Headline inflation was 3.58 % in March and core inflation 4.24 %, and the bank’s models see both measures staying within target through 2026; GDP rose 5.4 % y/y in March and 2.7 % in Q1, and is expected to expand by 4.0 %-4.5 % in 2025. Robust external inflows—exports and remittances each up roughly 12 % y/y in Q1 and FDI projected above USD 4.7 bn—have underpinned a 4 % peso appreciation this year, while reserves exceeded USD 15 bn in April (about 12 % of GDP, five months of imports). A weaker US growth outlook, still-high global rates, softer oil prices near USD 60/bbl and record-high gold prices frame the external backdrop, and the central bank reiterated its readiness to adjust policy to ensure macroeconomic and inflation 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.