Central Bank leaves rates unchanged in March

Third consecutive interest rate hold: At its meeting on 27 March, the Central Bank of the Dominican Republic (BCRD) opted to maintain its monetary policy interest rate at 5.75%. The decision met market expectations and marked the third consecutive hold since January.

Domestic and external factors drive the decision to hold rates: On one hand, interest rates were not hiked as inflation remained in the 3.0%–5.0% target range for 15 consecutive months through February, and there has recently been a moderation of private sector credit and domestic demand. On the other hand, monetary policy wasn’t loosened as elevated U.S. interest rates and global trade uncertainty threatened the Dominican peso. Finally, recent volatility in international financial markets called for a wait-and-see approach.

Rate cuts to resume later this year: The Central Bank did not provide specific forward guidance on the future direction of interest rates but reiterated its commitment to preserving macroeconomic stability and maintaining inflation within the target range. Our panelists expect the policy rate to end 2025 between 25–75 basis points below current levels. Global uncertainty weighing on the Dominican peso poses an upside risk to interest rates, while a weaker-than-expected domestic economy poses a downside risk. The Central Bank will reconvene on 30 April.

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