Stable Central Bank maintains interest rate at 5.25% per year
The Central Bank of the Dominican Republic (BCRD), in its monetary policy meeting of May 2026, decided to keep its reference interest rate unchanged at 5.25% per annum, as well as the permanent liquidity expansion facility ( 1-day Repos) at 5.75% and the remunerated deposit rate (Overnight) at 4.50%.
The decision was based on the gradual recovery of the Dominican economy and the fact that recent inflationary pressures are a response to the supply shock caused by higher international oil prices. The agency emphasized that medium-term inflation expectations remain anchored to the target of 4.0% ± 1.0%.
Internationally, the US economy maintained year-on-year growth of 2.6% in the first quarter, with unemployment hovering around full employment. However, inflation rose to 3.8% in April due to higher energy prices. In the Eurozone, economic activity slowed, and inflation stood at 3.0%, while in Latin America, average growth remained at 2.0%, with central banks opting to keep interest rates stable.
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Nationally, year-on-year inflation reached 5.11% in April, impacted by fuel price adjustments, although core inflation remained within the target range at 4.87%. The Government has implemented partial fuel subsidies and social assistance programs to mitigate the impact of energy prices.
The Central Bank of the Dominican Republic’s forecasting system projects that inflation will return to the target range in the fourth quarter of 2026, as the effects of the oil shock dissipate. Meanwhile, the economy is showing signs of dynamism: the monthly economic activity indicator (IMAE) grew 4.0% in January-April, driven by construction, free trade zones, and tourism.
The Dominican peso has appreciated by 8.0% as of the end of May, and international reserves have reached US$15.9 billion, equivalent to six months of imports, exceeding the IMF’s recommended metrics.
The Central Bank reaffirmed that the Dominican economy has solid fundamentals and a stable financial system. It reiterated its commitment to act promptly to meet the inflation target and preserve macroeconomic stability in an international environment marked by the crisis in the Middle East.
