- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.25%
The Central Bank of the Dominican Republic (BCRD) kept its policy rate at 5.25 % per annum at its 28 November 2025 meeting, with the 1-day repo and overnight deposit rates unchanged at 5.75 % and 4.50 %, respectively, citing persistent global uncertainty and food-price pressures linked to external shocks and tropical storm Melissa, while judging domestic liquidity and monetary-policy transmission as supportive of favourable financial conditions. After trimming the rate by a cumulative 50 bp in September and October, the BCRD has now paused. Liquidity support via the RD$81 bn facility—of which RD$73 bn is already disbursed—has driven the short-term interbank rate down to 7 % from 12.6 % in June. Year-on-year headline inflation was 4.23 % in October and core inflation 4.67 %, both within the 4.0 % ± 1 pp target band, and the bank’s forecasts and anchored expectations point to inflation remaining in target despite temporary weather-related food shocks; economic activity grew 2.0 % in Jan–Oct and is projected at 2.0–2.5 % for 2025 before rebounding to 4.0–4.5 % in 2026, while private-sector credit rose about 8 % y/y in November. Externally, the 2025 current-account deficit is seen at 2.5 % of GDP, comfortably financed by foreign direct investment of more than USD 4.8 bn; reserves stand near USD 14.5 bn (11.3 % of GDP, 5.4 months of imports) amid a stable exchange rate. The BCRD notes softer global growth, lower oil prices (WTI around USD 59) and record-high gold prices, alongside recent 50 bp Fed easing and no further 2025 ECB cuts expected. The central bank will keep monitoring conditions and stands ready to deploy additional measures to support activity while safeguarding the inflation target.
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.