Dominican Republic Monetary Policy October 2022

Dominican Republic

Dominican Republic: Central Bank tightens policy further in October

October 31, 2022

At its 31 October meeting, the Central Bank of the Dominican Republic (BCRD) delivered another 25 basis point hike, raising its policy rate to 8.50%. The move, which came on the heels of September’s equally-sized hike, resulted a cumulative 550 basis points of increases in ten meetings since November 2021, when policy normalization started.

Headline inflation continued its gradual moderation in September. Meanwhile, core inflation remained elevated, although the Bank noted it has started to show signs of softening, as it reacts with a lag to monetary policy moves. The BCRD assessed that the current monetary policy stance will lead to headline inflation falling back within its 3.0–5.0% target band before the end of Q2 2023. With regards to activity, the Bank noted it has remained robust in the first nine months of the year, providing more room to increase rates.

The BCRD did not provide hints on future policy moves in its communiqué. However, it stated that risks to the inflationary outlook remain elevated. As such, it concluded that it will continue to monitor economic variables and stands ready to take further action if needed in order to maintain price stability.

Following this year’s schedule, the Bank is expected to hold another policy meeting at the end of November. Our panelists see monetary policy being tightened further this year.

Our panelists see the policy rate ending 2022 at 8.8% and 2023 at 7.1%.

Author:, Economist

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Dominican Republic Monetary Policy Chart

Dominican Republic Monetary Policy November 2022

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

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