Central Bank explains the appreciation of the Dominican peso and its impact on the economy
The Central Bank of the Dominican Republic (BCRD) has issued a series of technical considerations regarding the recent public debate on the behavior of the exchange rate. In a year where the Dominican peso has shown a trend toward appreciation, the financial entity seeks to clarify the factors that influence this phenomenon under the current inflation targeting scheme.
Historically, the value of the local currency has been a fundamental variable for economic agents to plan their investments and consumption. Given the recent accumulated appreciation of 8.1%, the BCRD recalled that since 2012 it has operated under a scheme that prioritizes an inflation target of 4% ± 1%, managing to stabilize prices and anchor market expectations.
Key factors behind the peso’s strength
- Dynamism in foreign currency generation: During the first half of the year, key sectors such as tourism, exports, remittances, and foreign direct investment have injected a significantly higher flow of capital than that recorded in 2025, exceeding an additional US$2.8 billion.
- Reclassification of the exchange rate regime: In 2025, the International Monetary Fund reclassified the Dominican exchange rate regime to floating. This implies that the value of the peso is essentially determined by market supply and demand.
- Moderate interventions: The Central Bank clarified that, so far this year, it has made foreign currency purchases of US$415 million without executing sales in the spot market, refuting that its interventions are the main driver of the current appreciation.
The resilience of the Dominican economy is strengthened by a floating exchange rate regime, which allows for more efficient absorption of external shocks, maintaining financial stability in a global environment of uncertainty.
Alofoke Deportes
Favorable economic outlook
Despite international challenges and the volatility of commodity prices, the Dominican Republic maintains a solid macroeconomic position. The BCRD projects that inflation will close the year within the established target range, supported by a robust financial system and economic growth close to its potential.
Likewise, the dynamism of foreign exchange-generating sectors is expected to continue, projecting a manageable current account deficit of approximately 1.3% of Gross Domestic Product (GDP), which would be amply covered by foreign direct investment. The Central Bank reiterated its commitment to continue monitoring global conditions to ensure price stability and the proper functioning of the foreign exchange market.
