Dominican Republic Monetary Policy November 2022

Dominican Republic

Dominican Republic: Central Bank pauses tightening cycle in November

November 30, 2022

At its 30 November meeting, the Central Bank of the Dominican Republic (BCRD) opted to keep the policy rate unchanged at 8.50%, halting its monetary policy tightening cycle. The move followed a cumulative 550 basis points of increases since November 2021.

The decision was driven by the assessment that past hikes have delivered the desired effect of taming price pressures. Headline inflation moderated to 8.2% in October from its 9.6% peak in April. Similarly, core inflation has also receded in recent months. The Bank stated it believes the policy rate has reached the necessary level for headline inflation to continue trending towards the 3.0–5.0% target band and fall back within it before the end of Q1 2023.

The BCRD did not provide hints on future policy moves in its communiqué. However, if inflation continues its moderation, it is possible that the Bank will not increase rates further. The Bank concluded that it will continue to monitor economic variables and stands ready to take further action if needed in order to maintain price stability.

The Bank is expected to hold another policy meeting at the end of December. Most of our panelists see the policy rate ending the year at its current 8.50% level, and declining by end-2023.

FocusEconomics panelists see the policy rate ending 2023 at 7.13% and 2024 at 5.50%.


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Dominican Republic Monetary Policy Chart

Dominican Republic Monetary Policy November 2022 0

Note: Central Bank policy rate in %.
Source: Dominican Republic Central Bank.

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