The Central Bank reiterates that the Dominican financial system remains robust, well-capitalized, and with high profitability levels
The Governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, held an initial meeting with the IMF “Staff Visit,” led by Emilio Fernández-Corugedo, who will conduct a series of consultative visits to the country’s economic institutions over the course of a week to gather information for preparing the next Article IV mission.
During the meeting, Fernández-Corugedo stated that “the economic performance of the Dominican Republic is largely due to the social peace that characterizes the country, not forgetting the monetary policy measures taken, together with those related to governance.”
Fernández-Corugedo clarified “the consultative nature of the visit, as is customary for the IMF ‘Staff Visits,’ in preparation for the Article IV meeting.”
He also positively assessed the recent article by Valdez Albizu published in the media about the opportunities and challenges faced by the Dominican Republic in the international context, noting that the international institution considered it “clear and relevant,” emphasizing that the IMF’s criteria “are very much aligned with what the governor expressed in his communication.”
According to the press release, the IMF mission was also made up of Fernández-Corugedo, Manuel Rosales, senior economist; Pamela Madrid, senior economist; and Gerardo Peraza, resident representative in Central America, Panama, and the Dominican Republic.
Dominican Economy Snapshot
During the meeting held at the BCRD headquarters, Valdez Albizu presented an overview highlighting that “economic activity showed strong performance during 2024, with a growth rate of 5.0%, close to its potential and one of the highest in Latin America, with inflation at 3.35%, one of the lowest in the region, excluding dollarized economies, and a core inflation rate of 4.01%.”
He also mentioned that “going forward, as global uncertainty moderates and the monetary policy transmission mechanism continues to operate, the Dominican economy is expected to expand by around 4.5% to 5.0% by the end of 2025, remaining one of the highest growing economies in Latin America.”
Additionally, he referred to the labor situation, highlighting “an improvement with the unemployment rate standing at 4.8% in the last quarter of 2024, lower than the 5.0% recorded in 2023.”
He added that “employment reached a historic high of over 5 million workers, following an increase of about 98,000 employed during 2024, with formal employment rising by more than 140,000 people during this period, while informal employment decreased by about 42,000 people.”
Thus, the informality rate dropped to 54.8% in the last quarter of 2024, its historic minimum, excluding the atypical period of the COVID-19 pandemic.”
Furthermore, the governor informed that inflation “has remained within the target range of 4% ± 1% for the last 15 months, standing at 3.56% year-on-year in February 2025, while core inflation reached 4.21%, close to the center of the target.”
The Central Bank’s forecast models indicate that both general inflation and core inflation will remain within the target range of 4% ± 1% throughout the year and over the entire monetary policy horizon.
Central Bank Measures
Another notable aspect of his presentation was that “in a context of low inflationary pressures, the BCRD reduced its monetary policy rate (TPM) by 125 basis points during the second half of 2024, bringing it to 5.75% annually.”
Additionally, the BCRD implemented measures to increase liquidity in the financial system, including the extension of repurchase facilities up to 28 days, the redemption of Central Bank securities for approximately RD$140 billion during the last quarter of 2024, and the release of legal reserve resources amounting to RD$35.355 billion for housing construction and acquisition.”
Valdez Albizu emphasized that “the Dominican financial system remains robust, well-capitalized, and with high profitability levels. The solvency ratio of the financial system closed 2024 at 17.4%, above the regulatory minimum of 10%.”
He also mentioned that the return on equity (ROE) stood at 23.2%, while the return on assets (ROA) reached 2.8% in January 2025; meanwhile, the financial system’s non-performing loan ratio was just 1.5%.
The governor highlighted that by the end of February 2025, international reserves had surpassed $14.9 billion, equivalent to 11.6% of GDP and 5.4 months of imports.
Moreover, these reserve levels represent around 90% of the new reserve adequacy metric suggested by the IMF, a level considered comfortable.
Other Economic Topics
Regarding the exchange market, he expressed that during the first two months of 2025, an accumulated depreciation of 1.9% was observed, driven by the seasonal demand for foreign currency by importing companies for inventory replenishment and payments to suppliers, as well as by precautionary demand from economic agents due to increased global uncertainty.
He valued that “despite the uncertain international environment, it is projected that by the end of 2025, the current account deficit will be reduced to 3.0% of GDP; once again, fully financed by foreign direct investment, estimated at $4.7 billion.”
He concluded by noting that in total, “the Dominican economy generated about $43.8 billion in foreign exchange during 2024, and it is projected that during 2025, $45.7 billion will be generated.”
Central Bank Team
The governor was accompanied by the manager, Ervin Novas Bello; the deputy general manager, Frank Montaño; the deputy manager for Monetary, Exchange, and Financial Policies, Joel Tejeda Comprés.
Also present were the economic advisor to the Governor, Julio Andújar Scheker; the Dominican Republic’s representative to the IMF, Frank Fuentes; the suggesters Ramón González, Joel González, Máximo Rodríguez, and Brenda Villanueva; the directors Carlos Delgado, Elina Rosario, and José Perdomo; and consultant Liselotte Reyes.
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