Central Bank measures impact interest rate reduction

Santo Domingo – The Association of Multiple Banks (ABA) welcomed the monetary easing program, authorized by the Monetary Board and to be executed by the Central Bank, for RD$175,000 million that will be available to financial institutions before the end of the current year due to its potential favorable impact on the interest rates received by the public and the consequent effect on the dynamization of the economy.

The ABA stated that “this set of measures to be implemented by the authorities should accelerate the mechanism for transmitting interest rates downwards, as a result of the reductions of 100 basis points accumulated since August in the monetary policy rate, which would alleviate the financial cost.”

He highlighted, as part of these provisions, the redemption at maturity of Central Bank bills and notes that will amount to RD$140 billion during the last quarter of 2024, as well as the new release of resources from the legal reserve for RD$35,000 million for the financing of housing, especially low-cost housing, which will have rates of up to 10% per year with a term of seven years.

It also considered the extension by the Central Bank of the facilities for distributions to multiple banks by up to 28 days and the elimination of provisions to cover interbank operations that use securities issued by the Central Bank and the Ministry of Finance as collateral.