Credit to the private sector in national currency would register year-on-year growth of around 8.3% by the end of the year, driven by loans to construction, home acquisition, commerce and hotels and restaurants.
SANTO DOMINGO.- The Central Bank decided to maintain its monetary policy interest rate (MPR) at 5.25% per year and the rate of the permanent liquidity expansion facility (1-day Repos) remains at 5.75% per year, while the remunerated deposit rate (Overnight) continues at 4.50% per year.
This measure took into account global uncertainty and recent inflationary pressures, primarily linked to the impact of weather events on food prices. It is also expected that the monetary policy transmission mechanism will continue to operate efficiently, further contributing to favorable financial conditions.
The Central Bank reported that in the national environment, year-on-year inflation stood at 4.81% in November 2025, remaining within the target range of 4.0% ± 1.0% since mid-2023.
However, food component prices continue to be affected by the impact of weather events, such as Tropical Storm Melissa and heavy rains that impacted the production and marketing of agricultural goods.
Core inflation, which excludes the most volatile components of the basket, stood at 4.74% year-on-year, also within the target range set in the Monetary Program.
The Central Bank of the Dominican Republic's (BCRD) forecasting system indicates that while local inflation will continue to be affected in the short term by the effects of climate shocks, their impact is expected to gradually dissipate in the first part of 2026. Thus, headline and core inflation are expected to remain within the target range of 4.0% ± 1.0% over the monetary policy horizon. Furthermore, inflation expectations remain anchored to the midpoint of the target range.
The monthly economic activity indicator (IMAE) showed improvement in November, expanding by 3.2% year-on-year. This brings the accumulated growth for the first eleven months of 2025 to 2.1%, driven primarily by the agriculture and mining sectors, as well as financial intermediation services and hotels, bars, and restaurants, among others.
Decreasing interest rates
As the monetary policy transmission mechanism has been operating, a significant decrease in the interbank interest rate has been observed in recent months, falling from a high of 12.6% in June to 7.1% in December of this year.
During 2025, the weighted average passive rate of multiple banks has decreased from 9.8% to 6.0% annually in December 2025; while the active rate has decreased from 15.1% to 13.2% annually during the current year.
Credit to the private sector in local currency is projected to register year-on-year growth of around 8.3% by year-end, driven by loans for construction, home purchases, commerce, and hotels and restaurants. Likewise, monetary aggregates have strengthened, growing at rates exceeding the expansion of nominal GDP.
Public investment has accelerated in recent months, consistent with the State's revised budget for 2025.
In this way, the coordination of monetary and fiscal policies is expected to contribute to the gradual recovery of the Dominican economy, with a projected expansion of around 2.2% for 2025 and between 4.0% and 4.5% for 2026.
Regarding the external sector, foreign exchange generating activities are expected to maintain their dynamism with revenues of around US$46.8 billion during 2025, supported by the good performance expected for exports, tourism and remittances.
A current account deficit of 2.4% of GDP is projected for 2025, which would be easily covered by foreign direct investment, estimated at around US$4.9 billion.
In this context, the relative stability of the exchange rate is maintained, with an accumulated depreciation of the Dominican peso of around 3% observed during 2025, lower than the 5% depreciation recorded in 2024.
International reserves are expected to be above US$14.55 billion by the end of the year, equivalent to more than 11% of GDP and 5 months of imports, exceeding the metrics recommended by the IMF.
