The Central Bank of Dominican Republic lowered its benchmark interest by 50bps to 5 percent at its June 2019 meeting. It is the first rate cut so far this year, bringing borrowing cost to its lowest since 2016. Policymakers said that the decision is based on the risks balance regarding the inflation outlook including domestic and international macroeconomic developments and market expectations. The annual inflation rate fell to 1.31 percent in May from 1.61 percent in April, and it is projected that it will remain below the lower limit of the target range (4 percent ± 1 percent) until the end of 2019, converging to the midpoint of the range in 2020. The Committee noted that the economy growth moderated amid a slowdown in private investment, associated with external and internal uncertainty factors. Interest Rate in Dominican Republic averaged 7.35 percent from 2004 until 2019, reaching an all time high of 50 percent in February of 2004 and a record low of 1 percent in January of 2004.
Interest Rate in Dominican Republic is expected to be 5.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Dominican Republic to stand at 4.75 in 12 months time. In the long-term, the Dominican Republic Interest Rate is projected to trend around 5.00 percent in 2020, according to our econometric models.