Dominican Republic Interest Rate

Central Bank leaves rates unchanged in August

The BCRD stands pat for a 10th straight meeting: At its meeting on 31 August, the Central Bank of the Dominican Republic (BCRD) kept its policy rate at 5.25% for the 10th consecutive meeting. The policy rate remains among the highest in Central America and the Caribbean.

Persistent geopolitical tensions and a strong economy behind decision: The BCRD’s decision continued to reflect the absence of a clear need for additional stimulus. A cut was not justified in the Bank’s view, as the economy has remained dynamic, inflation is still being stoked by high oil prices, and there continues to be considerable global economic uncertainty. Still, a hike was also not justified for the Bank given anchored inflation expectations and forecasts of inflation returning to the 3.0–5.0% target range toward year-end.

Fewer panelists now see room for cuts in 2026: The BCRD did not provide explicit forward guidance. A majority of our panelists now expect rates to end the year at or above current levels, likely reflecting faster GDP growth vs last year, a hawkish U.S. Fed and continued geopolitical uncertainty. Upside risks to the policy rate stem from potential U.S. Fed hikes—the BCRD aims to maintain a steady interest-rate differential to prevent sharp fluctuations in the Dominican peso’s exchange rate against the USD—as well as severe El Niño weather conditions, which could push up inflation and inflation expectations. The BCRD is scheduled to reconvene on 30 September.

Panelist insight: EIU analysts commented: “The renewed US-Iran conflict will continue to disrupt commercial flows through the Strait of Hormuz, sustaining inflationary pressures in the short term. We forecast that inflation will ease back to within the BCRD's target range in the fourth quarter of 2026. However, a final cut of 25 basis points to reach a terminal rate of 5% will come only in mid-2027, moving in parallel with the Federal Reserve. There is a high risk that monetary officials maintain the policy rate at 5.25% for longer or raise the policy rate, especially if inflation (particularly for food and energy) picks up by more than we expect.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Dominican interest rate projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Dominican interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Dominican interest rate projections.

Want to get access to the full dataset of Dominican interest rate forecasts? Send an email to info@focus-economics.com.