Economy March 15, 2023 | 8:58 am

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US banking crisis will not affect the financial system of the Dominican Republic

The Monetary Board concluded in an extraordinary session held yesterday that the Dominican financial system has no direct interaction with failed banks in the United States. At the meeting, aimed at discussing the situation presented by international markets after the bankruptcy and closure of operations of the Silicon Valley Bank and Signature Bank, in the United States of America, the strength of the country’s financial system was highlighted. The authorities analyzed the causes that led to the closure of these entities, the measures adopted by the US government authorities, and the evolution of the main stock market indices in advanced economies.

In a press release from the Central Bank (BCRD) it is explained that at yesterday’s meeting, the authorities highlighted the strength of the Dominican financial system, reflected in sufficient liquidity and capital provisions to absorb unexpected shocks and maintain the orderly operation of the financial market. It was pointed out that, as of March 2023, the delinquency ratio of multiple banks remains at 1.0% with reserves that are four times higher than nonperforming loans, while regulatory solvency amounts to 15.3% as of December 2022, higher than the 10 % required by the Monetary and Financial Law. Likewise, it was determined that the International Reserves of the Central Bank, which to date amount to US$15.6 billion, are not exposed to the affected entities and are invested in first-line financial institutions and high credit quality.

In that same order, it was pointed out that international investors continue to value the Dominican economy very positively, as a result of the strength of its fundamentals and the stability of the Dominican peso, which to date reflects an accumulated appreciation of 2.6%.

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