The Central Bank of the Dominican Republic (BCRD), in its monetary policy meeting of September 2026, decided to increase its monetary policy rate (MPR) by 25 basis points, from 5.25% to 5.50% per annum. Likewise, the rate for the permanent liquidity expansion facility (1-day Repos) increases to 6.00% per annum, while the interest-bearing deposit rate (Overnight) increases to 4.75% per annum.
This decision is preventive in nature with the objective of preserving the anchoring of inflation expectations and avoiding second-round effects on prices, in a context of multiple supply shocks that have been more persistent than anticipated. In that regard, inflationary risks have increased in September due to higher oil prices and its derivatives in light of the evolution of the war conflict in the Middle East, as well as disruptions in global freight transport and adverse weather conditions. Furthermore, international financial conditions have become more restrictive.
In the United States of America (USA), the economy remains resilient, with economic growth projected at 2.1% for 2026 according to Consensus Forecasts. On the other hand, year-on-year inflation remained at 3.4%, still above the 2.0% target, while job creation rebounded in the month of August. Given this scenario, the Federal Reserve increased its benchmark rate by 25 basis points at its September meeting and indicated that it could make an additional increase before the end of the year.
In the Eurozone, growth prospects have improved, with economic activity projected to expand by 1.0% in 2026 according to Consensus Forecasts. Meanwhile, year-on-year inflation rose to 3.2% in August, remaining above the European Central Bank’s (ECB) 2.0% target. Given this outlook, the ECB increased its monetary policy rate by 25 basis points at its September meeting, and market analysts anticipate an additional increase toward the end of the year.
In Latin America, regional growth of 2.0% is expected in 2026, according to Consensus Forecasts. Meanwhile, inflation remains above target in several of the economies, influenced by the energy component. In this context, most of the region’s central banks have kept their monetary policy rates unchanged, although analysts foresee increases in some of the economies by the end of 2026.
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Regarding raw materials, the price per barrel of West Texas Intermediate (WTI) crude oil increased during September due to the escalation of the conflict in the Middle East. Thus, the price per barrel of WTI exceeded US$100 in the middle of the month, after which it moderated to about US$90 per barrel at the end of September. It is important to highlight that the prices of refined fuels show greater increases than those recorded for crude oil. On the other hand, the price of gold per troy ounce has moderated in September to around US$4,200, given higher yields on US Treasury bonds.
At the national level, year-on-year inflation has maintained its gradual convergence process toward the target range of 4% ± 1%, decreasing from 5.67% in June to 5.13% in August. Similarly, core inflation, which excludes the most volatile goods in the basket, moderated to 4.76% in the same period, remaining within the target range. This inflationary dynamic has been conditioned by the implementation of subsidies by the Dominican Government, through which the increase in refined petroleum products has been partially passed on to fuel prices.
The BCRD forecasting system indicates that year-on-year inflation would return to the target range of 4.0% ± 1.0% during the fourth quarter of the year. Likewise, the medium-term inflation expectations of economic agents are anchored to the center of the target established in the Monetary Program. It should be noted that inflation prospects present upside risks, conditioned by the effects of various armed conflicts and the incidence of weather phenomena on food prices.
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Considering the volatile environment, the BCRD will continue to actively manage the liquidity of the financial system so that it remains at adequate levels. Meanwhile, private credit in local currency expanded by around 7.5% year-on-year at the end of August, driven mainly by financing to productive sectors.
On the other hand, economic activity has maintained a strong performance during the year 2026, accumulating an expansion of 4.5% in the first eight months of the year. This behavior has been supported by the positive evolution of the construction, financial intermediation, and hotels, bars, and restaurants sectors. Looking ahead, it is projected that the momentum of investment and the resilience of the external sector will contribute to growth of around 4.5% in 2026, one of the highest in Latin America.
In that sense, the dynamism of foreign exchange-generating activities has contributed to the relative stability of the exchange rate, with an accumulated appreciation of the Dominican peso of around 6% at the end of September 2026. Likewise, international reserves stood at around US$15.4 billion at the end of August, equivalent to about 11% of GDP and some 5 months of imports, exceeding the metrics recommended by the IMF.
It is important to highlight that the Dominican economy has strong fundamentals, a solid financial system, and a resilient private sector that, together with coordinated monetary and fiscal policy actions, will contribute to continuing to navigate the challenging international landscape. The Central Bank will continue to monitor the international situation and its potential economic impact, with the objective of adopting the necessary measures that contribute to meeting the inflation target and maintaining macroeconomic stability.
