- 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 June 2025 meeting, citing heightened global uncertainty from escalating geopolitical conflicts that have increased oil-price volatility, persistently high US interest rates and, domestically, inflation that remains securely within the 4 % ± 1 pp target band alongside recently approved liquidity measures aimed at supporting credit. After cutting the rate by a cumulative 125 bp in the second half of 2024, the BCRD has held it steady throughout the first half of 2025. The overnight deposit and one-day repo facilities were also kept at 4.50 % and 6.25 %, respectively, while the Monetary Board authorised RD$81 bn of credit-support operations—including a RD$50 bn reserve-requirement release and the six-month rollover of RD$17 bn in maturing liquidity lines—at rates capped at 9 %. Annual headline inflation eased to 3.84 % in May and core inflation to 4.22 %, with forecasts showing both measures staying inside the target through 2026; monthly economic activity grew 3.1 % y/y in May, putting January–May expansion at 2.6 % and underpinning expectations for 3 %–4 % GDP growth this year, while private-sector credit rose about 8 % and is projected to accelerate to 10 %–12 % by year-end. On the external front, exports reached USD 6.1 bn and remittances USD 4.9 bn in the first five months of 2025, foreign direct investment is seen topping USD 4.7 bn for the year, the peso has appreciated 2.3 % to June, and reserves stand near USD 14.7 bn (about 11 % of GDP, five months of imports). The BCRD notes slowing US and euro-area growth, divergent global monetary stances and commodity-price swings, and reiterates it will continue to monitor conditions and act as needed to safeguard 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.