The Central Bank says its plan to considerably reduce the amount of deposit certificates it issues has been successful. The deposit certificates had been issued by the Fernandez government to reduce liquidity in the economy and compensate for inadequate management of government spending. The competition of the Central Bank with the commercial banks kept interest rates high and penalized private sector borrowing. In the past 11 months, the Central Bank has not renewed RD$2.5 billion in deposit certificates, returning these funds to individuals and institutions for deposit in the commercial banking system. The banking system now has an excess liquidity of RD$3 billion for lending which has considerably reduced the lending rates, bringing relief to business. Deposit certificates went from RD$6.37 billion in August 2000 to RD$3.8 billion at the close of June.
