RD maintains its monetary policy interest rate at 5.25% annually

Santo Domingo.- The Central Bank of the Dominican Republic reported this Thursday that it maintained its monetary policy interest rate at 5.25% per annum, after taking into consideration the increase in global uncertainty, as well as recent inflationary pressures, mainly associated with the impact of supply shocks on food prices. The issuer recalled that year-on-year inflation stood at 4.95%, within the target range of 4.0% ± 1.0%, "however, food prices continue to be affected by exogenous supply shocks to monetary policy, such as the impact of climatic events, which affected the production and marketing of agricultural goods", explained the bank in a document. He also specified that underlying inflation has been affected by increases in food supply services due to higher prices of these inputs, standing at 4.85% year-on-year, within the target range established in the monetary program. The Central Bank said that, according to its forecasting system, it is expected that the inflationary impact will gradually dissipate over the coming quarters as supply conditions normalize.

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The regulatory institution said that in the international environment, the U.S. economy remained resilient with growth prospects revised upwards to reach 2.1% in 2025 and 2.4% in 2026, according to the International Monetary Fund (IMF). Meanwhile, year-on-year inflation stood at 2.7% in December, above the Federal Reserve (Fed)'s 2.0% target, while the risks of a continued weakening of the labor market moderated. "Faced with this scenario, the Fed maintained its benchmark interest rate in the range of 3.50 – 3.75% per annum at its January meeting, with interest rate cuts expected to resume in the middle of this year," the information added.