Dominican Republic: Central Bank holds rate at 5.50% and expects inflation to return to target by year-end
Santo Domingo — The Central Bank of the Dominican Republic (BCRD) decided to keep its monetary policy rate unchanged at 5.50% per year following its October 2026 meeting, the institution announced on Thursday, October 30. The liquidity expansion facility rate (one-day repos) also stayed at 6.00%, as did the remunerated deposits (overnight) rate at 4.75%.
The decision was made amid international uncertainty, marked by prolonged armed conflicts and high prices for oil, its derivatives and other commodities. West Texas Intermediate (WTI) crude averaged around US$97 per barrel during October, according to the bank's statement.
On the domestic front, the Central Bank noted that year-on-year inflation kept moderating: it fell from 5.67% in June to 5.12% in September 2026. Core inflation, which excludes the most volatile prices, dropped from 4.96% to 4.61% and is already within the 4.0% ± 1.0% target range. The bank's forecasting models indicate that headline inflation will return to that range during the last quarter of the year.
Economic activity also showed solid performance: year-on-year growth reached 5.6% in September, with cumulative expansion of 4.6% between January and September. For the end of 2026, the BCRD projects growth of close to 4.5%, one of the highest in Latin America, and private credit in local currency up 7.4% year on year through September.
The Central Bank also highlighted that the Dominican peso has appreciated by close to 4% so far this year: the dollar selling rate went from RD$63.5512 on January 2 to RD$60.9007 on October 29, a drop of 4.17%. International reserves stand at around US$15.2 billion, equivalent to about 10.5% of gross domestic product, above the levels recommended by the International Monetary Fund.
The institution reaffirmed that it will keep monitoring the international situation and upward price risks, ready to adopt the measures needed to guarantee price and macroeconomic stability. In September, the Central Bank had raised its benchmark rate from 5.25% to 5.50% as a preventive measure against price pressures.
Photo: ERM Digital
Source: 7dias.com.do