Central Bank Guarantees Interest Rates in Private Banks to Decrease by 2.15%

The Central Bank pledged on Tuesday that the interest rates in terms of expected averages have gone down in commercial banks by 2.15% since December 31, 2008 thanks to the package of measures adopted by the financial monetary authorities which are attempting to revitalize the Dominican economy.

…there are no reasons why any commercial bank or association should raise the interest rates at this moment …

This was expressed by Rolando Reyes and Elvin Novas, administrative manager and financial manager of the Central Bank, who explained that in the time period mentioned the commercial interest rate dropped 2.37%, consumer loans were down 2.0% and mortgages were also down 2.37 %.

Taking part in a meeting of economic reporters and newspapers, sponsored by the Presidential Office of Information, Press and Publicity, the economist Novas called on the population not to become anxious as he confirmed that the interest rates irrevocably have a tendency to drop.  

Rolando Reyes added that there are no reasons why any commercial bank or association should raise the interest rates at this moment unless the debtor has increased the levels of risk, reported the Presidential Office of Information, Press and Publicity.  

In this sense the Deputy Administrative Manager of the Central Bank recommended to clients that they make themselves heard and defend their rights by complaining through the office of the Superintendant of Banks and that they should avoid agreeing to any abusive clauses in their loan agreements upon signing.

Renegotiating Loans

He indicated that debtors, protected by an administrative solution adopted by the State bank, can renegotiate their loans to pay them over a longer period of time and with a more flexible payment schedule with the bank where they took the loan out or with another bank. 

However, this means that currently the monetary and financial authorities can only put forward these guidelines to the private banks as they are contractually obliged to fulfill their agreements.

Reyes argued that measures recently adopted by the Monetary Authorities to render more flexible terms in order to accelerate a drop in interest rates and which include the release of 10.5 billion pesos of legal reserve are already showing positive results.
He clarified that given the global economic downturn, they have proposed three basic goals: reduce the cost of money and incentivize spending and investment; increase the flow of interest and facilitate access to financing.   

The Central Bank official pointed out, however, that the results of these measures, in macroeconomic terms, require time before definitive results are obvious and that the Central Bank must submit to a process of adjustment and readjustment.     

Rolando Reyes added that, in addition, the Central Bank has specialized and focused measures in place to help advance the vulnerable sectors of society. These include the small and media-sized businesses and the agricultural sector.

The conference between the Central Bank officials and the press was organized by Rafael Núñez, Director of the Presidential Office of Information, Press and Publicity.  Núñez said these meetings play an important in keeping people informed about the complex economic situation.