- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.75%
The Central Bank of the Dominican Republic (BCRD) left its policy rate at 5.75 % per annum at the May 2025 meeting, alongside unchanged overnight deposit and one-day repo rates of 4.50 % and 6.25 %, citing persistent global uncertainty, still-elevated long-term US yields and domestic inflation that has stayed inside the 4 % ± 1 % target band for two years. After trimming the policy rate by a cumulative 125 bp during the second half of 2024, the BCRD has held it steady so far in 2025. The corridor remains at 4.50–6.25 % and the central bank continues active liquidity management and recently adopted additional macro-prudential measures to safeguard financial stability. Annual headline inflation eased to 3.71 % in April and core inflation was 4.13 %, with forecasts pointing to target-consistent outcomes through 2026; GDP growth slowed to 2.5 % y/y in January-April but is projected at 3.5–4.0 % for 2025, while private-sector credit growth moderated to about 8 % in May. On the external side, January–April exports rose 8 % y/y, remittances 12.1 %, and foreign direct investment is expected to exceed USD 4.7 bn this year; the peso has appreciated 3.3 % and reserves stand above USD 14.7 bn (around 12 % of GDP, five months of imports). The statement notes weaker US and euro-area growth prospects, lingering trade tensions, and subdued oil prices near USD 61/bbl alongside record-high gold prices. The BCRD affirms it will continue monitoring conditions and stands ready to act to keep inflation within target and preserve macro-financial 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.