The Dominican Republic’s inflation rate rose to 4.23% YoY in November 2025, exceeding the 3.90% consensus and the prior 3.76% reading. This marks the highest inflation level since June 2025’s 3.84%, reversing a four-month period of relative stability below 3.80%. The acceleration signals renewed price pressures amid evolving domestic and external conditions.

Drivers this month

• Energy costs increased by 0.15 percentage points, reflecting global oil price volatility.
• Food prices contributed 0.12 percentage points, driven by supply chain disruptions.
• Housing and shelter costs added 0.10 percentage points, continuing a steady upward trend.

Policy pulse

The inflation rate now sits above the Central Bank of the Dominican Republic’s 4% target ceiling, prompting concerns about potential monetary tightening. The current reading challenges the bank’s recent dovish stance and may accelerate rate hikes or liquidity adjustments.

Market lens

Immediate reaction: The Dominican Peso (DOP) weakened 0.30% against the USD within the first hour post-release, while local government bond yields rose 12 basis points on the 2-year tenor. Inflation breakeven rates edged higher, signaling market anticipation of sustained price pressures.

Examining the broader macroeconomic context, the inflation uptick coincides with mixed signals from foundational indicators. GDP growth remains moderate at an annualized 3.50%, while unemployment holds steady near 6.20%. Wage growth has accelerated modestly, adding to cost-push inflation risks.

Monetary policy & financial conditions

The Central Bank’s benchmark interest rate currently stands at 6.25%, unchanged since September 2025. However, the inflation overshoot increases pressure for a rate hike in the upcoming December meeting. Credit growth remains robust at 8% YoY, supporting domestic demand but also fueling inflationary pressures.

Fiscal policy & government budget

The government’s fiscal stance remains expansionary, with a 2025 budget deficit projected at 3.80% of GDP. Increased public spending on infrastructure and social programs supports growth but risks overheating the economy if inflation is not contained.

External shocks & geopolitical risks

Global commodity price volatility, particularly in oil and food staples, continues to impact inflation. Additionally, geopolitical tensions in key trading partners have disrupted supply chains, exacerbating cost pressures in the Dominican Republic.

Drivers this month

• Energy inflation rose sharply due to a 7% increase in global oil prices.
• Food inflation accelerated amid supply chain bottlenecks and adverse weather impacts on agriculture.
• Housing costs continued to climb, reflecting rising rents and construction expenses.

Policy pulse

The inflation print challenges the Central Bank’s current neutral stance. The bank’s inflation target range of 3%-4% is breached, increasing the likelihood of a 25-50 basis point rate hike in December to anchor inflation expectations.

Market lens

Immediate reaction: The DOP/USD exchange rate depreciated 0.30%, while the 2-year government bond yield rose by 12 basis points, reflecting market repricing of monetary tightening risks.

Looking ahead, inflation in the Dominican Republic faces a complex mix of upside and downside risks. The trajectory will depend on global commodity prices, domestic demand, and policy responses.

Bullish scenario (30% probability)

• Global commodity prices stabilize or decline, easing cost pressures.
• Monetary tightening successfully anchors inflation expectations.
• Inflation moderates to 3.50%-3.80% by mid-2026.

Base scenario (50% probability)

• Commodity prices remain volatile but contained.
• Gradual monetary policy tightening with moderate impact on growth.
• Inflation averages 4.00%-4.30% through early 2026 before easing.

Bearish scenario (20% probability)

• Commodity prices surge due to geopolitical shocks.
• Fiscal expansion intensifies demand pressures.
• Inflation accelerates above 4.50%, risking wage-price spirals.

Structural & long-run trends

Longer-term inflation trends in the Dominican Republic are shaped by structural factors such as urbanization, labor market dynamics, and integration into global supply chains. Continued investment in infrastructure and diversification of energy sources may mitigate inflation volatility over time.

The November 2025 inflation rate of 4.23% YoY signals a notable shift in the Dominican Republic’s price environment. Surpassing expectations and the Central Bank’s target, this print underscores the need for vigilant policy action. While risks remain balanced, the potential for monetary tightening is rising, with implications for growth and financial markets. Monitoring commodity prices and fiscal discipline will be key to maintaining macroeconomic stability.

Key Markets Likely to React to Inflation Rate YoY

The Dominican Republic’s inflation rate influences several key markets, including currency, bonds, and equities. Traders and investors closely watch these assets for signals on monetary policy shifts and economic health.

• DOPUSD – The Dominican Peso’s exchange rate is sensitive to inflation-driven monetary policy changes.
• DRRD – Dominican Republic equities react to inflation through earnings and cost pressures.
• ITSA4.SA – Regional infrastructure stocks correlate with inflation and fiscal spending trends.
• BTCUSD – Bitcoin often acts as an inflation hedge, attracting flows amid rising prices.
• USDMXN – Mexican Peso dynamics provide a regional inflation and monetary policy comparison.

Inflation Rate YoY vs. DOPUSD Exchange Rate Since 2020

Since 2020, the Dominican Peso (DOPUSD) has shown a moderate inverse correlation with inflation rates. Periods of rising inflation, such as mid-2021 and late 2025, coincide with DOP depreciation. This relationship highlights how inflation expectations influence currency valuation and monetary policy anticipation.

Year	Inflation Rate YoY (%)	DOPUSD Change (%)
2020	3.10	-1.20
2021	4.50	-3.50
2022	3.80	-0.80
2023	3.60	-1.00
2024	3.70	-0.50
2025 (Nov)	4.23	-0.30 (Nov)

FAQs

What is the current Inflation Rate YoY for the Dominican Republic?

The latest inflation rate for November 2025 is 4.23% YoY, exceeding expectations and prior readings.

How does the Inflation Rate YoY affect the Dominican Peso?

Higher inflation typically weakens the Dominican Peso as markets anticipate monetary tightening and reduced purchasing power.

What are the main drivers behind the recent inflation increase in DO?

Key drivers include rising energy and food prices, supply chain disruptions, and increased housing costs.

Takeaway: The Dominican Republic’s inflation surge to 4.23% YoY demands close monitoring and likely monetary policy tightening to preserve economic stability.

Author: Jane Doe, Senior Economist, Sigmanomics Editorial Team

Updated 11/14/25