Dominican Republic: Central Bank holds rates for fourth consecutive meeting in April
Loosening cycle remains paused: At its meeting on 30 April, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy interest rate at 5.75%. The hold was the fourth consecutive since the beginning of this year.
Solid inflation and GDP growth outlook drives hold: In justifying its decision to hold rates instead of lowering them, the BCRD said it expected headline and core inflation to remain within its 3.0–5.0% target range through 2026. Regarding economic activity, the BCRD stated that it expects the economy to grow around 4.0–4.5% in 2025, among the highest in the region, meaning there was no rush to lower interest rates.
Forward guidance remains open-ended: The Central Bank did not provide specific forward guidance. Our panelists expect the policy rate to end 2025 between 25–100 basis points below current levels. A weaker-than-expected domestic economy plus further strengthening of the currency supported by higher good exports, remittances and foreign direct investment in the wake of higher global trade uncertainty pose downside risks to rates.
The Central Bank will reconvene on 29 May.