- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.25%
The Central Bank of the Dominican Republic (BCRD) left its policy rate unchanged at 5.25 % at the December 2025 meeting, citing persistent global uncertainty and temporary food-driven price pressures from recent climatic shocks while judging that an operative policy-transmission mechanism is supporting benign financial conditions. After lowering the rate by a cumulative 50 bp in September-October from 5.75 %, the BCRD kept the 1-day repo facility at 5.75 % and the overnight deposit rate at 4.50 %, noting that the interbank rate has fallen to 7.1 % in December from 12.6 % in June and that the RD$81 bn liquidity programme continues. November headline inflation eased to 4.81 % and core to 4.74 %, both within the 4 % ± 1 pp target band, and the bank expects food-price shocks to fade and inflation to remain inside the range through the policy horizon; economic activity improved, with the IMAE up 3.2 % y/y in November and year-to-date growth at 2.1 %, while private-sector credit is set to grow 8.3 % in 2025 amid sharply lower bank lending rates. Externally, robust export, tourism and remittance inflows are projected to generate USD46.8 bn in foreign exchange, financing a 2.4 %-of-GDP current-account deficit; the peso has depreciated a moderate 3 % in 2025 and reserves are expected to top USD14.55 bn (over 11 % of GDP and five months of imports). The BCRD highlighted resilient US growth and a December 25 bp Fed cut, softer euro-area prospects, stable WTI prices around USD58/bbl and record-high gold, all of which frame its outlook. The central bank pledged to keep monitoring conditions and stands ready to take further actions to sustain activity while ensuring inflation remains within 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.