After the decision of the Federal Reserve from U.S (FED) of leaving interest rates unchanged, the economist Miguel Collado DiFranco said it was not expected that the Federal Reserve announced an increase in the monetary policy rate now in January, but when it reduced asset purchases to zero.
“This was ratified today (yesterday) and I think that the purchase of assets will end, as they had already said, in March. From then on, it is expected that, if conditions remain the same as they are now, said by the president of the FEDthey will begin to make increases in rates in March”, he pointed out.
He explained that once they start making the increases, they will consider reducing the general balance of the Federal Reservewhich has doubled since the pandemic to date.
“From now on our debt (Dominican Republic) will be more expensive, in fact, the risk perceived by investors in relation to emerging economies is being noticed and they are already demanding better yields”Economist
He added that to the extent that the Federal Reserve increase rates and subsequently reduce liquidity, reducing assets on the balance sheet, this will affect all countries, but especially countries with more perceived risks.
“It is necessary to moderate the rate of indebtedness that we carry (RD) and this is beginning to be perceived by the higher yields that investors demand to buy debt securities such as countries like ours,” he explained.
The FED yesterday left interest rates unchanged in a range between 0% and 0.25%, but announced that the high inflation experienced in the country leads to expect a rate hike “soon”.
The US central bank has also decided to continue to reduce the monthly rate of bond purchases, and plans to eliminate it completely in early March. he
