Central Bank leaves rates unchanged in November

Bank pauses rate cuts: At its meeting on 28 November, the Central Bank of the Dominican Republic (BCRD) maintained its policy interest rate at 5.25%. As such, the policy rate remains 50 basis points below its level at the start of the year and 325 basis points below its peak in early 2023.

Bank stands pat to assess inflationary impact of Hurricane Melissa: Inflation remained within target in October, and the economy grew tepidly in Q3, but the BCRD decided to stand pat regardless as it assesses the impact of Hurricane Melissa on food prices.

Rate cuts to resume ahead: Most of our panelists expect the BCRD to cut by another 25–50 basis points in December, while the rest see it extending its pause. Looking further ahead to 2026, the policy rate should end the year at a five-year low as inflation remains within target and the Central Bank aims to invigorate domestic demand. The BCRD should reconvene again in December.

Panelist insight: EIU analysts said: “We forecast that [the Central Bank] will make a final cut of 25 basis points by end-2025 to reach a terminal rate of 5%. There is a moderate risk that the BCRD will pause and only make the final cut in early 2026. In the medium term, there is a risk that policymakers would have to respond to local inflation picking up by more than we currently expect for example in the event of a re-escalation of the US-China trade war (lifting prices in the US), which would pass through to the Dominican Republic via higher import prices, as the US is the country's main source of imported goods.”

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