Central Bank (BC) Governor Hector Valdez Albizu has confirmed that interest rates might go up, as predicted by the Banks Association (ABA). The banks warned of a possible increase in interest rates after the Central Bank announced restrictive measures to halt the upward trend of the exchange rate earlier this week. Nevertheless, Valdez Albizu said that although interest rates might go up one or two points, this “is less harmful than if the exchange rate were to rise to a level that later on cannot be reached.”
“We have made our calculations, and we think that the effect will be in fact less prejudicial for people, society, for economic agents, and for people who live on a salary, if the exchange rate does not go up 100 points above the level it reached last year, than if the interest rates move one or two points,” he stated. Valdez Albizu was speaking at a ceremony at the Altar de la Patria yesterday, Wednesday 11 February 2015, as part of celebrations in the lead-up to national Independence Day.
The Central Bank has announced that the planned injection of between US$150 million and US$200 million of reserves into the exchange market has already begun to have an effect, although very slight. Yesterday, the exchange rate was US$1 – RD$44.97 on average, compared to RD$44.99 on Tuesday, 10 February 2015, the day after the Central Bank made the announcement of the injection, when the rate was RD$44.95 to the US dollar. According to a survey by the Central Bank, the exchange rate went from RD$44.33 to the US dollar on 2 January 2015 to RD$44.98 to the US dollar on 9 February.
http://www.listindiario.com/economia-and-negocios/2015/2/11/355963/BC-tasa-de-interes-podria-subir