- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 5.25%
The Central Bank of the Dominican Republic held its monetary policy rate at 5.25% in April 2026, citing the Dominican economy’s gradual first-quarter recovery and inflation expectations that remain anchored to target, despite a turbulent international backdrop marked by the Middle East conflict and higher oil and other commodity prices. The rate has been unchanged at 5.25% since January 2026 after 25 bp cuts in September and October 2025 from 5.75%. The Central Bank of the Dominican Republic also left its 1-day repo rate at 5.75% and its overnight deposit rate at 4.50%. Annual inflation eased to 4.63% in March, within the 4.0% ± 1.0% target band, and the central bank said it could temporarily move above the upper bound in coming months before returning to target by year-end, while the monthly economic activity indicator rose 5.1% in March and private credit in local currency expanded around 9% year on year. On the external side, the Dominican peso had appreciated about 5.2% by end-April and reserves stood at about USD16 billion, equal to 12% of GDP and roughly six months of imports. Globally, the central bank highlighted above-target inflation in the United States and the euro area and West Texas Intermediate crude above USD100 at end-April. The Central Bank of the Dominican Republic said it will continue monitoring international conditions and take timely measures needed to support compliance with 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.