The decision of the Central Bank in the monthly monetary policy meeting of November 2021, to raise its Monetary Policy Rate (MPR) from 3.00% to 3.50%, does not apply to the liquidity facilities granted by the institution for an amount of up to RD $ 215,814.3 million.
These facilities of which mention is made represent 5% of the gross domestic product (GDP), and have been directed so that financial intermediation entities can channel loans to the productive sectors, households and micro, small and medium enterprises (MSMEs), in order to mitigate the adverse economic impact of the covid-19 pandemic, thus contributing with the necessary stimulus for the maintenance of productive and consumer activities.
In a clarifying document, the agency said that the resources granted to financial intermediation entities through the Rapid Liquidity Facility (FLR) are maintained at an invariable interest rate until maturity of 3.0% per year, guaranteed with securities issued by the Ministry of Finance, the Central Bank, private companies and low-risk credit portfolio.
Likewise, the facilities granted through the Repo Financing Window are maintained at 3.5% per annum, guaranteed with securities issued by the Ministry of Finance and by the Central Bank, which is why they must be maintained up to 8% per annum, unchanged until maturity. , the rates of the loans channeled by said entities to the productive sectors; and for households and MSMEs at the competitive rates originally agreed between the entities and the debtors, in accordance with the inherent costs of these market segments.
“In the same way, the interest rates of the loans granted to the aforementioned sectors with resources released from legal reserve must be kept fixed until their maturity. In other words, the terms and conditions of the loans channeled by financial intermediation entities cannot be modified with resources obtained in the different liquidity windows of the Central Bank ”, indicated the Central Bank.
The aforementioned interest rates will remain unchanged for the renewals of credit lines maintained by the BCRD after the beginning of the gradual and orderly return of the liquidity granted through the different facilities, so that the productive sectors, households and MSMEs have these resources. at low cost, as the necessary working capital to continue their productive activities normally.
Comprehensive evaluation has been made on the covid
The BCRD reaffirmed its commitment to macroeconomic stability and the proper functioning of the financial and payment systems, remaining vigilant to adopt the necessary measures for such purposes in a timely manner. The decision regarding the benchmark rate was based on a comprehensive assessment of the impact of the covid on global production and increased external inflationary pressures.
