Dominican Republic

Dominican Republic Monetary Policy June 2024

Dominican Republic: BCRD holds rates in June

At its meeting on 30 June, the Central Bank of the Dominican Republic (BCRD) kept its monetary policy interest rate (TPM) at 7.00%, the permanent liquidity expansion facility rate (1-day Repos) at 7.50% and the remunerated deposit rate (Overnight) at 5.50%.

The key factors influencing the BCRD’s decision included inflation, which rose to 3.2% in May, reentering the Bank’s 3.0-5.0% target range. Moreover, both headline and core inflation are expected to remain within the target range for the remainder of this year. The Bank also took into account the recovery of the Dominican economy and the dynamism of private credit. Lastly, it noted that higher-for-longer interest rates in the U.S. and elevated commodity prices further necessitated the hold.

The Bank did not provide specific forward guidance. However, it restated that it would continue to monitor macroeconomic developments with the aim of adopting timely measures to preserve macroeconomic stability and keep inflation within the target range. Our Consensus is for about 75 basis points of further rate cuts this year, in line with the U.S. Fed’s pivot. That said, the spread of panelist forecasts is between 25–125 basis points of rate cuts. The Bank is expected to convene again in late July.

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