Did you know that banks do not use all the money they receive in deposits? This is due to a key mechanism in the Dominican financial system: the legal reserve.
He legal reserve It is the obligation of financial intermediation entities to maintain a percentage of the funds raised from the public in the Central Bank or in another place designated by the Monetary Board. This percentage applies to all fundraising modalities and instruments, whether in national or foreign currency.
The Monetary Board may extend this obligation to other passive, contingent or service operations. Failure to comply with this rule carries sanctions as established by law.
The latest data from the Association of Multiple Banks of the Dominican Republic (ABA) indicate that, in the country the legal reserve The current rate is 12.0% for deposits in pesos and 20% in dollars. This means that for every deposit, banks must keep a portion intact as a liquid reserve.
He effective lace that the banks register to date is higher than what is required by regulation, representing 12.2% as of October 2024. This carries a value of 210,574 million pesos, for a surplus of 3,334 million pesos.
In the case of foreign currencythe required reserve is 20%, as of October 2024. 13,327 million dollars are subject to this regulation, which implies a required reserve of 2,665 million dollars. In this regard, banks also maintain a surplus of 3.2%, for an effective reserve requirement of 3,090 million dollars.
But he legal reserve It not only protects savers. It is also a monetary policy tool. For example, at the beginning of the pandemic, the Central Bank released part of these funds to boost the economy, channeling resources towards productive sectors and affected families.
- Recently, the Monetary Board (JM) authorized the Central Bank to release some 35,000 million pesos, equivalent to 1.75% of the requirement of legal reserveso that financial intermediation entities can channel these resources into new loans for home acquisition, interim loans and home construction, at an annual interest rate of up to 10% per year.
He legal reserve It is not just a requirement. It is a fundamental piece to balance financial stability and economic development. Because behind every peso saved, there is a system designed to protect it and make it grow.
