Central Bank leaves rates unchanged in January

Latest bank decision: At its meeting on 30 January, the Central Bank of the Dominican Republic (BCRD) decided to maintain its policy interest rate unchanged at 5.25%. The decision was the third consecutive hold and kept the policy rate 325 basis points below its past-decade peak, which it reached in early 2023.

Bank remains on hold amid food price shocks: The BCRD opted to stand pat once again due to the impact of Hurricane Melissa on food and services prices, and it ruled out a rate hike, as inflation remained within its 3.0–5.0% target range in December. The Bank expects climate-related price shocks to dissipate in the coming quarters, with both headline and core inflation seen within target at the end of 2026. Meanwhile, the Bank did not cut rates as economic activity grew at a healthy rate in December and in 2025 as a whole, and the BCRD expects GDP growth to accelerate from 2.1% in 2025 to 4.0% in 2026.

Most panelists still see rate cuts this year: In 2026, most of our panelists expect 25–75 basis points of rate cuts. As such, the policy rate should end the year at a five-year low, as inflation should stay within target and the Central Bank will likely shift its focus to invigorating domestic demand. Still, a minority expect the Bank to either keep the policy rate at its current level through year-end or to raise it, in line with stronger-than-expected price shocks. The BCRD should reconvene at the end of February.

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