- 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 29 August 2025 meeting, with the overnight deposit and 1-day repo facilities kept at 4.50 % and 6.25 % respectively, judging that domestic inflation—3.40 % y/y in July with core at 4.19 %—remains comfortably inside the 4 % ± 1 ppt target while global financial conditions stay restrictive and geopolitical and trade uncertainties persist. After cumulative cuts of 125 bp in the second half of 2024, the benchmark rate has been on hold throughout 2025. Implementation continues to rely on a liquidity-provision programme of DOP 81 bn, of which DOP 51 bn has been disbursed, supporting credit flows at easing bank lending rates. Activity is strengthening: the monthly economic activity index expanded 2.9 % y/y in July and the bank still sees GDP growth of about 3 % in 2025, picking up to 4–5 % in 2026, while private-sector credit in local currency is growing above 8 % and is expected to reach 10–12 % by year-end. On the external front, international reserves stand near USD 13.8 bn (around 11 % of GDP and five months of imports) and a 2025 current-account deficit of 2.5 % of GDP is projected to be comfortably financed by USD 4.8 bn in foreign direct investment. The statement highlights weaker global growth, still-high foreign interest rates, lower oil prices (WTI at USD 64/bbl) and elevated gold prices around USD 3,400/oz. The BCRD affirms it will keep monitoring conditions and retains room to act further to support activity while ensuring inflation stays within the target band.
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.