The entity stated that the accumulation of two significant shocks such as the pandemic and Russia's war with Ukraine has placed the world in an inflationary situation that has not occurred in recent decades, turning into a complex, volatile and uncertain scenario.
SANTO DOMINGO– In response to the decision by the Central Bank of the Dominican Republic (BCRD) to increase its monetary policy interest rate by 100 basis points, from 5.50% annually to 6.50%, theAssociation of Multiple Banks of the Dominican Republic (ABA) stated that the transmission channel for this measure is definitely through bank interest rates, both active and passive, which banks are obligated to adjust as these operations are renewed, always considering the particularities and characteristics of each activity.
The association pointed out that the above will always be aligned with the signals of monetary policy aimed at controlling inflation and ensuring that the economy grows according to its potential, so that certainty can be preserved to successfully navigate this difficult international situation.
The ABA considered the monetary measures adopted by the Central Bank to be appropriate and timely, under the understanding that one of its main reasons is the control of inflation.
In a press release, the organization stated that the accumulation of two major shocks, such as the pandemic and Russia's war with Ukraine, has placed the world in an inflationary situation not seen in recent decades, creating a complex, volatile, and uncertain outlook.
In that regard, he noted that the Federal Reserve of the United States of America recently approved the largest interest rate hike in 22 years to contain inflation and plans to continue raising rates this year.
He explained that, in this global context, economies are focused on trying to control inflation, due to the harm it causes to both individuals and businesses. “Latin America and our country are no exception. Most central banks in the region have made significant increases in their monetary policy rates, especially those that follow the inflation-targeting model,” he added.
The ABA indicated that the banking sector is willing to continue supporting productive sectors, including small and medium-sized enterprises, in these new scenarios, where prudence, comprehensive risk management, and support must prevail, so that credit continues to play a relevant role in generating wealth and employment.
