Dominican Republic

Dominican Republic Monetary Policy June 2023

Dominican Republic: Central Bank delivers smaller rate cut at June meeting

At its meeting on 29 June, the Central Bank of the Dominican Republic (BCRD) slowed the pace of its loosening cycle and delivered a smaller 25 basis point cut, bringing the policy rate to 7.75%. The move followed May’s 50 basis point cut.

The BCRD acknowledged that measures taken to tame inflation have succeeded; headline inflation fell within its 3.0–5.0% target band in May—for the first time since August 2020—sooner than the BCRD had initially expected. Further supporting the rate cut, the Bank’s forecasts that June inflation will recede to around 4.0%—the mid-point of the target range. Similarly, core inflation also cooled through May.

As in previous communiqués, the Bank did not provide any hints on future policy moves. The BCRD reaffirmed its commitment to preserving macroeconomic stability and maintaining the inflation rate within its target. All of our panelists expect the Bank to cut the policy rate further before the end of the year.

The BCRD is expected to hold its next policy meeting before the end of July.

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