Hoy newspaper says that the Central Bank has issued savings certificates for RD$51 billion and editorial editor Mario M?ndez warns that this will have a tremendous financial cost for the country. The certificates have been placed at annual interest rates ranging from 24 to 36%. M?ndez says that the Central Bank will have to pay RD$15 billion in interest on the bonds over the year. This does not take into account the fact that the Central Bank will need to redeem the capital once the certificates expire, he says.
M?ndez also relates that the Central Bank had discontinued to update its web page. But a recent such update, however, indicated that domestic financing had increased to RD$63.86 billion, up from RD$7.2 billion in December 2002 and RD$3.6 billion in December 2001.
M?ndez says that financial circles are alerting that if the Central Bank does not lower the interest rates on the certificates, the quasi fiscal deficit will be too high and the government will be forced to levy new taxes.
?It makes no sense that to benefit some depositors, the economy and taxpayers should be obliged to pay such a high cost,? one analyst told the reporter. The analyst says that the restrictive monetary policies implemented by the government are curtailing economic development.