- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.5%
The Central Bank of the Dominican Republic (BCRD) held its annual policy rate at 5.50%, citing expected inflation convergence towards target and anchored expectations despite persistent international uncertainty, following a cut to 5.25% in October 2025 and a 25-basis-point increase in September 2026. The central bank will continue actively managing financial-system liquidity to maintain adequate levels. Annual inflation eased to 5.12% in September and is projected to return to the 4.0% ± 1.0% target range in the fourth quarter. Economic growth is forecast at around 4.5% for 2026, supported by investment and external-sector resilience, while domestic-currency private credit growth was driven mainly by lending to productive sectors. Foreign-exchange inflows supported relative exchange-rate stability, with the peso recording a cumulative appreciation through end-October. Prolonged conflicts kept oil and other commodity prices elevated, while reduced global refining capacity intensified pressures on refined-fuel prices. The BCRD flagged upside inflation risks from conflicts and potential weather-related effects on food prices and said it would monitor international developments and adopt measures as needed to meet its inflation target and preserve macroeconomic 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% from January through August 2026, with the Central Bank of the Dominican Republic initially judging higher inflation to reflect mainly food supply shocks linked to external factors and climate events, then citing the Middle East conflict, oil-related supply pressures, recovering activity and anchored inflation expectations, and later pointing to stronger domestic activity and persistent global uncertainty from the conflict and higher international oil prices. In September, the Central Bank of the Dominican Republic raised the policy rate by 25 basis points to 5.50% in a preventive move to keep inflation expectations anchored and prevent second-round price effects as supply shocks proved more persistent than expected and inflation risks increased due to higher oil and refined-product prices linked to the Middle East conflict, disruptions to global goods transport, adverse weather and more restrictive international financial conditions. In October, it held the policy rate at 5.50%, weighing continued international uncertainty from prolonged conflicts and elevated oil, refined-product and other commodity prices against forecasts that inflation would return to the 4.0% ± 1.0% target range in the fourth quarter, with headline inflation easing to 5.12% and core inflation to 4.61% in September and medium-term inflation expectations remaining anchored at the target midpoint.