SANTO DOMINGO. – The Central Bank of the Dominican Republic (BCRD), at its monetary policy meeting in November 2025, decided to maintain its monetary policy interest rate (TPM) at 5.25% per annum .
Likewise, the rate of the permanent liquidity expansion facility (1-day Repos) remains at 5.75% per annum, while the rate of remunerated deposits (Overnight) continues at 4.50% per annum.
This measure took into consideration the levels of global uncertainty and the recent inflationary pressures, mainly associated with the impact of external shocks and Storm Melissa on food prices.
It was also noted that the monetary policy transmission mechanism will continue to operate and that liquidity will remain high, which will continue to contribute to favorable financial conditions.
Regarding the international outlook, the prospects for the United States remain moderate, with projected growth of 2.0% in 2025, according to Consensus Forecasts. Meanwhile, year-on-year inflation stands at 3.0%, above the Federal Reserve's (Fed) target of 2.0%.
On the other hand, the labor market continues to show signs of weakening, with the unemployment rate rising to 4.4% in September. Given its dual mandate, the Fed has reduced its benchmark interest rate by 50 basis points (bps) since September of this year.
In the Eurozone, economic activity is projected to grow by 1.3% in 2025, impacted by geopolitical conflicts and trade uncertainty. Meanwhile, year-on-year inflation stood at 2.1% in October 2025, close to the European Central Bank's target of 2.0%.
In this context, after a cumulative decrease of 100 basis points during the current year, no further interest rate cuts are expected for the remainder of 2025.
In Latin America , average growth of 2.2% is projected for 2025. As external financial conditions have eased, most central banks in the region have reduced their monetary policy interest rates during the year to support domestic demand.
Regarding raw materials, the price per barrel of West Texas Intermediate (WTI) oil remained stable at around US$59 at the end of November, due to lower global demand and increased production.
Meanwhile, the price of gold is at an all-time high, around US$4,200 per troy ounce, as it is used as a safe haven in a turbulent and volatile environment. The evolution of these commodity prices represents an improvement in the terms of trade for the Dominican Republic, which would have a positive impact on the current account of the balance of payments.
Local overview
In the national context, year-on-year inflation stood at 4.23% in October 2025, remaining within the target range of 4.0% ± 1.0% since 2023. However, food component prices are being affected by external shocks and by the effects of Tropical Storm Melissa and heavy rains that impacted the production and marketing of agricultural goods.
Meanwhile, core inflation, which excludes the most volatile components of the basket, stood at 4.67% year-on-year. The Central Bank of the Dominican Republic's forecasting system indicates that, while local inflation is expected to increase temporarily due to weather shocks, it will remain within the target range of 4.0% ± 1.0% over the monetary policy horizon. Furthermore, inflation expectations remain anchored at the midpoint of the target range.
On the other hand, the monthly indicator of economic activity (IMAE) registered an accumulated growth of 2.0% in the first ten months of 2025, affected during the month of October by the adverse impact of storm Melissa on productive and commercial operations.
In a context of low inflationary pressures, the Central Bank of the Dominican Republic (BCRD) reduced the Monetary Policy Rate (MPR) by 50 basis points cumulatively since September, with the aim of fostering monetary conditions that contribute to boosting domestic demand.
At the same time, the Central Bank of the Dominican Republic (BCRD) continued implementing the RD$81 billion liquidity provision program approved by the Monetary Board in June, with disbursements to date reaching approximately RD$73 billion. Furthermore, macroprudential measures were adopted to safeguard the strength of the financial system, which boasts high levels of capitalization, liquidity, and solvency.
As the monetary policy transmission mechanism operates, a significant decrease in the interbank interest rate has been observed in recent months, falling from a high of 12.6% in June to 7.0% in November of this year.
Similarly, during the last year the weighted average passive rate of multiple banks has decreased from 10.2% to 6.0% annually in November 2025 (420 bps); while the weighted average active rate has decreased from 16.1% to 13.6% annually (245 bps) in the same period.
Meanwhile, private credit in local currency registered year-on-year growth of around 8% at the end of November, driven by loans to construction, home purchases, commerce, and hotels and restaurants.
Credit to the private sector in local currency is projected to accelerate its expansion to between 9% and 11% year-on-year by year-end. Furthermore, monetary aggregates have strengthened, growing at rates exceeding nominal GDP growth.
Additionally, public investment has accelerated in recent months , consistent with the revised 2025 State budget. This coordination of monetary and fiscal policies is expected to contribute to the recovery of the Dominican economy, which is projected to close this year with growth of around 2.0–2.5%. By 2026, economic activity is expected to gradually return to its potential growth rate, with projected expansion between 4.0% and 4.5%.
Regarding the external sector, the Dominican economy is expected to generate foreign exchange of around US$46 billion during 2025, supported by the good performance expected for total exports (US$14.9 billion), tourism revenue (US$11.2 billion) and remittances (US$11.7 billion).
In that regard, a current account deficit of 2.5% of GDP is projected for 2025, which would be easily covered by foreign direct investment, estimated at more than US$4.8 billion.
In this context, the relative stability of the exchange rate is maintained and international reserves stand at around US$14.5 billion, equivalent to about 11.3% of GDP and 5.4 months of imports, exceeding the metrics recommended by the IMF.
It is important to highlight that the Dominican economy has strong 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.
In this challenging international environment, the Central Bank of the Dominican Republic will continue to monitor the evolution of the economy and assess opportunities to continue adopting timely measures that contribute to boosting economic activity, reiterating its commitment to keeping inflation within the target range.
