SANTO DOMINGO. – The Dominican Republic's Association of Multiple Banks (ABA) estimated that the reallocation of RD$21,424.4 million of the legal reserve requirement, ordered by the Monetary Board for financing the construction sector and the acquisition of low-cost housing, will have a multiplier effect on the Dominican economy and facilitate access to decent housing for hundreds of families.
The association explained that, of the resources released for such purposes, a total of RD$18,394.8 million corresponds to multiple banks, of which RD$14,715.8 million (equivalent to 80%) will be allocated to the acquisition of homes and the remaining RD$3,679 million (20%) to the financing of the construction sector.
The ABA considered that the Central Bank's decision does not contradict its objective of counteracting inflation and is "a timely measure with a great economic and social impact, given the great benefits it represents for thousands of Dominican families who could realize their dreams of having their own decent roof over their heads.".
He welcomed the measure, noting that it will facilitate access to fixed-rate financing for the first five years for low-cost housing, with an interest rate no higher than 9% annually. He recalled that, according to the Dominican Republic's Mortgage Market Development and Trust Law, the indexed value of these properties is up to RD$4.5 million.
In addition, the ABA stated that families could benefit from an even lower interest rate with the subsidies included in the government program called “Happy Housing”, whose facilities were recently improved by the Presidency of the Republic, to allow access to financing by contributing as an initial contribution between 2 and 5 percent of the value of the property.
The association representing the country's multiple banks indicated that the reallocation of these resources will boost the construction sector, whose growth was around 0.6% in the January-November 2022 period, and, in turn, will have a positive impact on other sectors that offer services to this productive branch.
Furthermore, the ABA highlighted the multiplier effect of these liquidity facilities, which translates into greater economic growth and employment opportunities, in addition to the considerable impact in terms of financial inclusion, given that among the potential beneficiaries there are segments of the population that are not banked.
He argued that the positive effects of this measure will directly contribute to improving the quality of life of thousands of Dominicans, which is one of the fundamental pillars for promoting an increasingly developed, inclusive, and safe society.
