The Central Bank is leading efforts to boost the Dominican economy and now adds a special package for low-cost lending for sectors in farming, commerce, construction, small businesses and even households significanty affected by flooding brought by the intense rains on 18 November 2023.
Central Bank governor Hector Valdez Albixzu highlighted that the monetary stimulus program seeks to maintain the gradual recovery of economic activity, in a context in which inflation would remain within the target range of 4% ± 1% established in the monetary program.
The governor indicated that financial intermediation entities will be able to channel resources to the abovementioned sectors at an annual interest rate of no more than 9%. Of the total authorized, RD$20 billion will be allocated for new loans and the remaining RD$5 billion may be used for the refinancing and restructuring of loans to households and micro, small and medium-sized businesses (MSMEs), under more favorable conditions. Additionally, financial intermediaries may use second-tier mechanisms that allow loans to be channeled to MSMEs through entities specialized in this market niche.
He added that the resources under this provision will be provided at an interest rate of 3% annually for financial intermediation entities, within a period of two years from the disbursement, except in the case of new loans for the acquisition of homes, which may be up to five years. To access this facility, entities must present securities issued by the Ministry of Finance or the Central Bank as collateral for these operations.
Valdez Albizu pointed out that this new FLR complements the monetary stimulus program implemented since June 2023 through reductions in the monetary policy interest rate and liquidity provision measures to contribute to the revitalization of domestic demand, in an environment of low inflationary pressures. It is appropriate to remember that, prior to this new facility, liquidity measures had been approved for some RD$180 billion, of which some RD$158 billion have been disbursed and approximately RD$22 billion remain available for use.
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Central Bank
28 November 2023