Dominican Republic Interest Rate

Central Bank leaves rates unchanged in May

The BCRD holds for seventh consecutive meeting: At its meeting on 29 May, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy interest rate at 5.25%, the level it has been at since November 2025. That said, interest rates remain among the highest in Central America and the Caribbean.

Iran energy price shock drives hold: The BCRD held rates instead of cutting as higher oil prices pushed up transport costs and inflation in April, while the economy continued to recover gradually. At the same time, a hike was also unnecessary as medium-term inflation expectations remain anchored to the Central Bank's target of 3.0–5.0%.

Monetary policy easing expected by end of the year: The Central Bank did not provide any forward guidance. By the end of 2026, most of our panelists expect 25–75 basis points of rate cuts. That said, a minority expects the BCRD to keep rates unchanged or lift the policy rate beyond its current level by December, probably reflecting a longer-than-expected impact on inflation from Hurricane Melissa and the Iran energy price shock. Persistently elevated global energy costs and possible drought conditions linked to the El Niño weather event later this year pose upside risks to the outlook. The BCRD should reconvene at the end of June.

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