Dominican Republic

Dominican Republic Monetary Policy December 2023

Dominican Republic: Central Bank pauses loosening cycle in December

At its 28 December meeting, the Central Bank of the Dominican Republic (BCRD) paused its loosening cycle and kept the policy rate at 7.00%. The hold came on the heels of its November 25 basis point cut—which brought the cumulative rate reduction to 150 basis points since May.

December’s hold was driven by headline inflation coming in at the mid-point of the BCRD’s 3.0–5.0% target range in November. Moreover, core inflation eased further in the same month, confirming the consolidation of the downward trend. Further supporting the decision, the Bank’s headline and core inflation expectations for 2024 lie within the target band.

December’s communiqué was void of explicit forward guidance. The Bank reiterated once again that it stood ready to take any necessary action to keep inflation within its target band and preserve macroeconomic stability. All of our panelists have penciled in further interest rate cuts throughout 2024.

The BCRD is expected to convene again at the end of January.

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