Diario Libre writes today on how banks and loans and savings associations have done great business by taking advantage of the government policy of ?saving depositors.? The newspaper highlights in a front-page story today that banks attract deposits at rates under 25% and then deposit them to the Central Bank at double the yield.
In the first half of the year, commercial banks and loans and savings associations purchased an additional RD$20 billion in savings certificates in the Central Bank at annual yields of above 50%, while paying half of that in interest payments to their own depositors.
?This means that the Central Bank has become the principal source of profitability for financial entities,? says the report.
Quasi-fiscal debt at the Central Bank is said to be about RD$90 billion, and 70-90% of this debt has been deposited by commercial banks and loans and savings associations.