In a notice issued on Friday, 26 November 2021, the Central Bank (BCRD) clarifies that the 50 points increase in the monetary police rate will not impact the rates of the credit facilities granted to stimulate the economy following the pandemic. In other words, the BCRD says the terms and conditions of loans channeled by financial intermediaries with funds obtained from the different liquidity windows of the Central Bank cannot be modified.
The Central Bank of the Dominican Republic (BCRD) says that the increase of the monetary policy rate from 3.00% to 3.50% does not apply to the liquidity facilities granted by the Central Bank for the financial intermediation entities to channel loans to the productive sectors, households and micro, small and medium enterprises (MSMEs) to stimulate production and consumer spending.
The Central Bank has made available up to RD$215.81 billion, or 5% of the GDP to mitigate the adverse economic impact of the Covid-19 pandemic.
In a notice, the BCRD clarifies that the resources granted to the financial intermediation entities through the Rapid Liquidity Facility (FLR) are being kept at the same interest rate of 3.0% per year until maturity. The bank explains these funds are guaranteed with securities issued by the Ministry of Hacienda, the Central Bank, private companies and by low risk credit portfolio. Likewise, the facilities granted through the Repo Financing Window are maintained at 3.5% per year, guaranteed with securities issued by the Ministry of Hacienda and the Central Bank, for which reason the rates for loans channeled by such entities to the productive sectors should be maintained at 8% per year until maturity. Mortgage and MSMEs loans are to be kept at the same competitive rates originally agreed between the entities and the debtors.
Likewise, the interest rates of loans granted to the referred sectors with funds released from the legal reserve must remain fixed until their maturity.
Likewise, the referred interest rates will remain invariable for the renewals of credit lines maintained by the BCRD after the beginning of the gradual and orderly return of the liquidity granted through the different facilities, so that the productive sectors, households and MSMEs can count on these resources at low cost, as working capital necessary to continue with normality their productive activities.
The Central Bank of the Dominican Republic reaffirms its commitment to macroeconomic stability and the proper functioning of the financial and payment systems, remaining vigilant to adopt in a timely manner the necessary measures for such purposes.
Central Bank
DR1 News
Listin Diario
Listin Diario
29 November 2021