US Fed Will Drive Dominican Rate Hike In 2019

• According to Fitch, the Banco Central de la República Dominicana (BCRD) will likely hike its benchmark interest rate in 2019 in order to partly preserve its interest rate differential with the US and minimize pressure on the Dominican peso.

 

• Historically low inflation and robust capital inflows will allow the bank to enact fewer hikes than the US Fed, and grant it flexibility if real GDP growth slows more than anticipated in 2019.

 

• Fitch forecasts that the BCRD will hike its benchmark interest rate by 25 basis points (bps), to 5.75%, by end-2019.  

(Source: Fitch)