Central banks in Dominican Republic, Colombia, and Honduras raise interest rates

Several central banks in Latin America have implemented interest rate hikes to combat persistent inflation and global economic pressures.

The Central Bank of the Dominican Republic increased its monetary policy rate by 25 basis points, from 5.25% to 5.50%. This preventive measure aims to anchor inflation expectations amid supply shocks, including rising oil prices due to Middle East conflicts and climate-related food cost increases. Economists note this could increase credit costs and moderate economic growth.

In Colombia, the Banco de la República raised its monetary policy rate by 25 basis points to 12.25%. The decision was influenced by high inflation, a 23% increase in the minimum wage for 2026, and fiscal deficits.

Meanwhile, in Honduras, the Central Bank of Honduras also raised its rate by 25 basis points. However, the Honduran Association of Banking Institutions (AHIBA) indicated that they do not foresee conditions for abrupt further increases, citing existing liquidity in the financial system and a desire to maintain credit flow to productive sectors.