Rising Savings Reflects Investor Uncertainty
Finance. Last year savings in pesos rose 31% and in dollars 17% compared to 2019. Reading. Low consumption and investment is a sign of caution.
The Association of Commercial Banks (ABA) of the Dominican Republic says that savings increased 31% between January and November 2020, reflecting lower consumer spending and general uncertainty in the first Covid-19 year. Savings accounts increased from RD$503.48 billion for the same period in 2019 to RD$660.24 billion in 2020. Savings in US currency increased from US$8.41 billion to US$10.14 billion, for a 17% increase in regards to 2019.
This increase, although it reflects the high level of confidence in the financial system, also shows the permanence of the state of uncertainty imposed by the restrictions to control the Covid-19 pandemic, say experts in economics.
ABA also explains that the government contributed to the increase in savings when it extended its social programs, turning hundreds of thousands of poor into bank customers when new savings accounts were opened for these.
Hundreds of thousands of more Dominicans opened bank accounts to make online payments for water, electricity, and communications services to avoid attending banking entities, both to avoid contagion and unnecessary lines during the health crisis.