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. It also kept 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 emphasised that medium-term inflation expectations remain anchored to the target of 4.0% ± 1.0%.
• 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 peso has appreciated by 8.0% as of the end of May, and international reserves have reached US$15.9Bn, equivalent to six months of imports, exceeding the IMF’s recommended metrics.
• The Central Bank reaffirmed that the 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.

(Source: Dominican Today)