Apolinar Veloz, the Central Bank?s operations manager, reported that the Central Bank has redeemed RD$4 billion this week in expired certificates of savings. He says that only RD$280 million had been placed by individuals, while RD$3.73 billion (90%) was deposited by commercial banks. These commercial institutions, entrusted with the savings of a general public that is leery of depositing their funds to the Central Bank, pay out low interest rates of less than 25%, and then deposit the funds at the Central Bank where these have earned annual yields of up to 60%.
Diario Libre reports that in the coming weeks some RD$20 billion in savings certificates will expire.
Veloz hoped that these certificates would be would returned to the bank in the form of renewed certificates, which will pay an average 45% interest. The Central Bank has been gradually reducing the rates it pays on the certificates.