- 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 % per year in July 2025, leaving the 1-day repo and overnight deposit rates at 6.25 % and 4.50 %, respectively, as inflation remains well anchored inside the 4 % ± 1 % target band (headline 3.56 % and core 4.15 % in June) while global financial conditions stay tight despite a recent easing of trade tensions. Following cumulative cuts of 125 bp in the second half of 2024, the benchmark has been unchanged through 2025. The stance is reinforced by a RD$81 bn liquidity-provision scheme—about RD$40 bn already disbursed—to support credit transmission alongside earlier macro-prudential measures. Domestically, economic activity expanded 2.4 % year-on-year in January-June and is forecast to grow 3.0–3.5 % in 2025, with private-sector credit up more than 8 % and monetary aggregates accelerating. On the external front, export receipts rose 10.4 % and remittances 11.2 % in the first half, helping the peso appreciate 0.3 % against end-2024 and keeping reserves above USD14.2 bn, around five months of imports. Policymakers noted persistent but easing global uncertainty, with the US Federal Reserve and European Central Bank on hold and commodity prices volatile, and affirmed they will continue monitoring conditions and stand ready to act to sustain growth while preserving 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.