The Central Bank of the Dominican Republic kept its monetary policy rate at 5.25% in May 2026, citing the Dominican economy’s gradual recovery and recent inflation pressures linked to a negative supply shock from higher international oil prices, while noting that medium-term inflation expectations remain anchored at its 4.0% ± 1.0% target; the rate has been held at 5.25% since October 2025 after 25 basis point cuts in September and October from 5.75%. The central bank also left the 1-day repo facility at 5.75% and the overnight deposit rate at 4.50%, and said it has been actively managing system liquidity to keep financial conditions adequate and bank lending rates stable. Headline inflation rose to 5.11% in April, after staying within target since May 2023, and BCRD forecasts it could remain above the target range in coming months before returning to target in the fourth quarter as the oil shock fades; private credit in local currency is expanding by around 9% year on year. Economic activity improved in early 2026, with the monthly activity indicator averaging 4.0% growth in January-April, and output is projected to expand by around 3.5%-4.0% in 2026. On the external side, the peso has appreciated by about 8.0% as of end-May and international reserves stand at about USD 15.9 billion, equal to 12% of GDP and around six months of imports. BCRD said global uncertainty remains high because of the Middle East conflict and oil price volatility, and it will continue monitoring inte
Central Bank of the Dominican Republic2026-05-29
Central Bank of the Dominican Republic Holds Monetary Policy Rate at 5.25%
The Central Bank of the Dominican Republic kept its monetary policy rate at 5.25% in May 2026, with the 1-day repo facility 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 noting that medium-term inflation expectations remain anchored at its 4.0% ± 1.0% target. Headline inflation rose to 5.11% in April and may stay above target in coming months before returning in the fourth quarter, while the central bank said it will keep monitoring global uncertainty and act as needed to meet its inflation objective.