In a move aimed at stimulating the economy and making homeownership more accessible, the Dominican Republic’s Central Bank (BCRD) has announced a series of monetary policy adjustments after its late November 2024 meeting.
During the November 2024 meeting, the BCRD’s Monetary Board decided to:
• Reduce the policy interest rate by 25 basis points to 6.00% per annum. This is the latest in a series of rate cuts aimed at easing borrowing costs and boosting economic activity.
• Release RD$35.335 billion in reserve requirements to be channeled into loans for home purchases, particularly for low-income families. This measure is expected to spur the housing market and create jobs in the construction sector.
• Lower the interest rates on various liquidity facilities to further stimulate lending and economic growth.
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These decisions come in response to favorable economic indicators, including low inflation and strong economic growth. The BCRD has cited the recent decline in global commodity prices and the easing of monetary policy in advanced economies as additional factors supporting these measures.
The release of reserve requirements will allow banks to lend more money at lower rates, making it easier for individuals to purchase homes. The Central Bank has stipulated that 40% of these funds must be used for low-cost housing loans with terms of up to seven years, making homeownership more attainable for lower-income families.
The remaining funds will be allocated to construction loans, interim financing, and home purchases up to RD$15 million with terms of up to seven years.
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Listin Diario
DR1 News
4 December 2024