Central Bank lowers rates in October

Rates down to an over three-year low: At its meeting on 30 October, the Central Bank of the Dominican Republic (BCRD) decided to lower its monetary policy interest rate (TPM) by 25 basis points to 5.25%. The policy rate is now down 50 basis points from the start of the year and 325 basis points below its peak in late 2022.

Within-target inflation and sluggish domestic activity motivate cut: The BCRD opted to reduce the policy rate in October as inflation has remained within the target range since mid-2023 and key sectors of the economy—particularly construction and manufacturing—have shown signs of weaker momentum amid elevated trade uncertainty and more restrictive financial conditions than anticipated.

Panelists expect further rate reductions through end-2026: Most of our panel now expects a further 25 basis point cut by December. Continued easing in 2026 should bring the policy rate to its lowest level since January 2022. The pace and timing of monetary policy loosening by the U.S. Fed is a key factor to watch, while a stronger-than-expected domestic economy and a weaker-than-projected Dominican peso are upside risks to the policy rate.

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 6 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.

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