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Central Bank confirms interest rates might go up one or two points

SD. The Governor of the Central Bank (BC), Hector Valdez Albizu, confirmed that the interest rates might go up, as had been forecast by the bank Association (ABA), after the announced measure to halt the upward trend of the exchange rate.

Nevertheless, the official said that although interest rates might go up one or two points, this “is less harmful, less perverse and does less damage, than if the exchange rate goes to a level that later on cannot be reached.” “We have done our calculations, and we think that the effect will be in any case less prejudicial for the people, the society, for the economic agents, and for those that live on a salary, that the exchange rate does not go up 100 points above what it had last year, that if the interest rates move one or two points,” he indicated.

Valdez Albizu offered the statements, after assisting a wreath-laying ceremony at the Alter to the Fatherland in commemoration of the National Independence.

The announcement made by the Central Bank regarding the injection of between US $150 million and US $200 million into the exchange market has already begun to have affects, although very slight, and yesterday the exchange rate was a dollar in exchange for RD$44.97, while last Tuesday it was RD$44.99 for a dollar, according to a survey carried out in various financial entities by the agency that regulates the monetary policy.

The official institution also did a survey at the remittance agencies and exchange houses, and were able to note that in those places, yesterday the exchange rate was RD$44.94 for a dollar and last Tuesday (a day after the Central Bank made the announcement of the injection) it was RD$44.95 for a dollar.

According to the survey carried out by the Central Bank, the exchange rate went from RD$44.33 for a dollar last 2 January to RD$44.98 for a dollar on 9 February.

And in the exchange houses during the same timeframe, the rate was RD $44.33 for a dollar and RD$44.94 for a dollar, respectively.

The announcement of the injection of dollars into the Dominican exchange market was made by the Governor of the Central Bank last Monday during a press conference carried out at the headquarters of the official entity, where in addition, he said that the Monetary Board had taken this decision because of the “atypical” movements in the exchange rate.

The Central Bank:

The Governor of the Central Bank said that the recent movements that had been seen in the exchange rate do not correspond to the monetary and fiscal conditions of the country. In addition, Valdez Valdesia Albizu said that “in order for it not to continue there is an excess of liquidity,” which gives incentives to the purchase of dollars, the Monetary Board also ordered an increase in the legal reserves by two percentage points, with which they intend to reduce the availability of pesos in the financial institutions.

Source: DiarioLibre

February 12, 2015

Category: DR News |

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