SANTO DOMINGO - The Central Bank of the Dominican Republic (BCRD) announced that its monetary policy interest rate will remain at 5.75% annually .
The agency notes in a press release that the rate of the permanent liquidity expansion facility (1-day repos) remains at 6.25% per annum, while the rate of remunerated deposits (overnight) continues at 4.50% per annum.
He explained that implemented taking into consideration the increase in global uncertainty, associated with the escalation of geopolitical conflicts that has caused greater volatility in the price of oil.
The Central Bank of the Dominican Republic (BCRD) also maintained that US interest remain high due to inflationary risks that could materialize from new tariff policies.
Meanwhile, at the national , it was indicated that the
recently adopted liquidity provision measures were taken into account, which would contribute to boosting credit to the private sector as the monetary policy transmission mechanism operates, in a context where inflation has remained within the target range of 4.0% ± 1.0% contemplated in the inflation targeting framework for the last two years.
He noted that year-on-year inflation was 3.84% in May 2025, while core inflation, which excludes the prices of the most volatile components of the basket, stood at 4.22% in May, both around the center of the target.
Forecasting models
The Central Bank indicated that and core inflation target range of 4.0% ± 1.0% during 2025 and 2026, under an active monetary policy scenario.
He also noted that during the last half of 2024, the Central Bank reduced its benchmark interest rate by a cumulative 125 basis points
monetary policy rate unchanged , while adopting macroprudential measures with the aim of strengthening financial stability.
It is recalled that to mitigate the impact of uncertainty and restrictive external financial conditions on the monetary policy transmission mechanism, the Monetary Board approved in June a set of measures aimed at facilitating credit to productive sectors through financial intermediaries, for an amount of RD$81 billion.
Specifically, the release of legal reserve resources for RD$50 billion was authorized, along with RD$14 billion available from the legal reserve measure approved in November 2024, to
channel loans to productive sectors at an interest rate no higher than 9% per year.
RD$17 billion of previous liquidity facilities that were due to expire from June of this year was postponed for six months
On the other hand, the international environment revealed that the economic outlook for the United States has deteriorated, with growth now projected at 1.5% for 2025, according to Consensus Forecasts. In that context, US economic growth for January-March 2025 slowed to -0.5% annualized quarter-on-quarter, moderating the year-on-year change in gross domestic product (GDP) for the first quarter to 2.0%. Meanwhile, inflation reached 2.4% in May, above the 2.0% target.
In this scenario, the Federal Reserve maintained the benchmark interest rate at its June meeting, with cuts expected to resume in the second half of the year.
In the Eurozone, GDP is projected to grow by 1.0% in 2025, according to Consensus Forecasts, impacted by geopolitical conflicts and trade tensions. Meanwhile, year-on-year inflation stood at 1.9% in May 2025, below the 2.0% target.
Given this scenario, the European Central Bank reduced its monetary policy rate by 25 basis points in June to stimulate aggregate demand, and market analysts expect it to make a
further cut in the remainder of the year.
In Latin America , economic growth is expected to remain moderate for the remainder of 2025, expanding by 2.0%. However, given the high levels of uncertainty, most central banks are keeping their monetary policy interest rates unchanged, including those of Chile, Colombia, Costa Rica, Guatemala, Paraguay, Uruguay, and the Dominican Republic.
On the other hand, the Central Bank of Brazil continued to increase its benchmark interest rate in response to the resurgence of strong inflationary pressures.
Regarding raw materials, the price per barrel of West Texas Intermediate (WTI) oil showed greater volatility in June as a result of the conflicts in the Middle East.
Indeed, after reaching a peak of US$76 per barrel in mid-June, the price of WTI crude moderated to US$65 by the end of the month. Meanwhile, the price of gold remains near US$3,300 per troy ounce, as it is used as a safe-haven asset in a complex international environment.
Domestically, the monthly economic activity indicator (IMAE) registered year-on-year growth of 3.1% in May 2025, driven by improved performance in the
mining, agriculture, manufacturing, and construction sectors.
Thus, the average cumulative growth was 2.6% during January-May . Looking ahead, the Dominican economy is expected to grow around 3.0%–4.0% in 2025, as
global uncertainty dissipates and there is room to continue easing monetary conditions
to help boost domestic demand.
In that regard, private credit in local currency registered year-on-year growth of around 8%
at the end of June and is projected to accelerate its pace of expansion in the second
half of the year, reaching between 10% and 12% year-on-year by year-end. Similarly,
broader monetary aggregates continue to grow at rates close to the expansion
of nominal GDP, consistent with the projections in the Central Bank of the Dominican Republic's monetary program.
In the external sector, total exports exceeded US$6.1 billion in January-May
2025, growing 9.8% year-on-year; while remittances reached US$4.9
billion in the same period, increasing 11.9% year-on-year. Furthermore, foreign direct investment is projected to
exceed US$4.7 billion in 2025, covering the current account deficit
.
The favorable evolution of foreign exchange generating activities has helped to mitigate the impact of uncertainty on the foreign exchange market , with an accumulated appreciation of the Dominican peso of around 2.3% as of June 2025.
In this context, international reserves stood at around US$14.7 billion in June, equivalent to about 11% of gross domestic product and about five months of imports, exceeding the metrics recommended by the International Monetary Fund (IMF).
The Central Bank highlighted that the Dominican economy has strong macroeconomic fundamentals and a resilient productive sector, which are reflected in a better perception of country risk compared to the average of Latin America and other emerging economies.
