SANTO DOMINGO.– The Dominican Republic's Multiple Banking Association (ABA) welcomed the change in monetary policy stance (TPM) implemented by the Monetary Board and announced by the Central Bank, believing it will boost productive activities and, consequently, the growth of the national economy.
“The effectiveness of monetary policy, in coordination with the fiscal policy implemented to reduce and mitigate inflationary pressures with a high component of the global environment, generates a climate of certainty for local and foreign direct investment,” the banking association stated in a press release.
The entity emphasized that the statement constitutes a turning point that marks the beginning of the normalization of monetary policy initiated in November 2021.
The ABA stated that achieving inflation within the target range of 4% ±1% through proactive and timely measures provides monetary policy with leeway to begin the path towards lower rates and noted that the official provision opens the door for a gradual reduction of bank interest rates.
The union estimated that the announcement of the reduction in the Monetary Policy Rate (MPR), along with complementary measures that the Monetary Board and the Central Bank will adopt regarding the provision of liquidity, will facilitate financing to productive sectors and households under favorable conditions, supporting the objective of economic growth in the second half of this year that is around 4%.
Similarly, he considered that the additional provisions could influence the transmission of reductions in the monetary policy rate to occur in a shorter time, through the active and passive interest rates offered by financial institutions.
The ABA estimated that, under this context, productive sectors that have a multiplier effect on wealth and employment, such as construction and SMEs, will be favored, as they will be able to access credit under better financial conditions, with a positive impact on the return on their investments and the expansion of their business horizons.
The banking association also welcomed the fact that the official measure is aimed at maintaining the strength of savings, capital flows and foreign investment to our country by preserving, in this reduction of the Monetary Policy Rate (MPR), a favorable interest rate differential with respect to the United States of America.
“Dominican multiple banking is reacting favorably to this new scenario and always with the intention of channeling resources towards the different productive sectors and households, to contribute to the growth of productivity, the national economy and the general well-being of the country,” the ABA stated.
