The Central Bank of the Dominican Republic (BCRD) left its monetary policy rate unchanged at 5.25% in June 2026, after holding at 5.75% through August 2025 and cutting 25 basis points in both September and October, citing the Dominican economy’s gradual recovery and inflation pressures tied to a negative supply shock from higher international oil prices, while stressing that medium-term inflation expectations remain anchored to its 4.0% ± 1.0% target. The 1-day repo facility remains at 5.75% and the overnight deposit rate at 4.50%, and the central bank said it is actively managing system liquidity to support stable bank interest rates. Headline inflation rose to 5.35% in May on fuel-price adjustments linked to oil costs, while core inflation was 4.86%, and the monthly economic activity indicator (IMAE) grew 4.7% year on year in May as private credit in local currency expanded around 9%. External inflows helped keep the exchange rate relatively stable, with the Dominican peso showing a cumulative appreciation of about 5% by end-June, while international reserves stood at roughly USD15.8 billion, equivalent to about 6 months of imports. The BCRD said resilient US activity, weaker euro area growth and above-target inflation in several economies continued to shape the backdrop, even as West Texas Intermediate (WTI) crude fell sharply from around USD90 at end-May to around USD70 after a Middle East agreement. The central bank expects inflation to remain above the target range in t
2026-06-30Central Bank of the Dominican Republic
Central Bank of the Dominican Republic Holds Policy Rate at 5.25%
The Central Bank of the Dominican Republic kept its monetary policy rate at 5.25% in June 2026, with the 1-day repo rate at 5.75% and the overnight deposit rate at 4.50%, citing the economy’s gradual recovery and inflation pressures from higher international oil prices while maintaining that medium-term inflation expectations remain anchored to its 4.0% ± 1.0% target. Headline inflation rose to 5.35% in May and core inflation to 4.86%, but the central bank expects inflation to start easing in the second half of the year and return to target in the fourth quarter, as economic activity grew 4.7% year on year in May and reserves stood at about USD15.8 billion.