Dominican Republic: Central Bank extends pause in monetary easing at February meeting
Rates remain stable for second straight meeting: At its meeting on 28 February, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy interest rate (TPM) at 5.75%. The decision marked the second consecutive hold and met market expectations.
Uncertain external backdrop prompts extended pause: The key domestic factors influencing the BCRD’s decision to stand pat included inflation, which has remained within the target range of 3.0–5.0% for 14 consecutive months, and the strong performance of the Dominican economy, which grew 5.0% in 2024. The Bank also noted rising global economic uncertainty and expectations of higher-for-longer interest rates abroad.
Consensus is for cuts to resume this year: Once again, the BCRD did not give explicit forward guidance. The majority of our panelists see 25–75 basis points of rate cuts this year, but some analysts expect the Bank to either hold rates at current levels. Upside risks to interest rates include unexpected commodity price spikes and a weaker-than-expected peso, which could be provoked by higher-than-expected interest rates in the U.S. The Bank will meet again in late March.