NewsWhore
02-26-2009, 02:40 PM
Private sector borrowing in February was down, despite a reduction in interest rates ordered by Central Bank authorities. However, loans to public sector entities are increasing at an unusually high rate.
Hoy newspaper says that according to official figures, bank loans to the private sector decreased by more than RD$2 billion during the first 16 days of February, going from RD$246 billion to RD$243.94 billion. With reference to December 2008, the reduction was even more significant, an RD$8 billion decrease, since in December there were private sector loans for RD$252 billion.
Contrastingly, public sector borrowing registered a significant increase during the final months of last year when it reached RD$44.76 billion. For 2007, the difference is all the more significant, since in 2007 the banks lent the public sector just RD$22 billion. So far this year, loans to the public sector have increased by more than RD$2 billion, going from RD$42.38 billion in December 2008 to RD$44.7 billion on 16 February 2009. Hoy reports on the increased borrowing by the government from commercial banks, to compensate for a decline in tax collections and the reduction in financing of petroleum purchases under the PetroCaribe agreement with Venezuela. PetroCaribe financing increased when the price of petroleum was going up.
An indication of the reduced liquidity of the private sector can be seen in the M-1 (the amount of money in circulation) that saw a 5.5% decrease as of 16 February 2009 versus a year ago. Monetary authorities have relaxed some of the economic controls in an attempt to get the economy going again. As reported in Hoy, the reduction in interest rates on Overnight and Lombarda loans is proof of the new policies. Economist Hugo Guillani Cury suggested raising the amount of money in circulation to December 2008 levels.
More... (http://www.dr1.com/index.html#6)
Hoy newspaper says that according to official figures, bank loans to the private sector decreased by more than RD$2 billion during the first 16 days of February, going from RD$246 billion to RD$243.94 billion. With reference to December 2008, the reduction was even more significant, an RD$8 billion decrease, since in December there were private sector loans for RD$252 billion.
Contrastingly, public sector borrowing registered a significant increase during the final months of last year when it reached RD$44.76 billion. For 2007, the difference is all the more significant, since in 2007 the banks lent the public sector just RD$22 billion. So far this year, loans to the public sector have increased by more than RD$2 billion, going from RD$42.38 billion in December 2008 to RD$44.7 billion on 16 February 2009. Hoy reports on the increased borrowing by the government from commercial banks, to compensate for a decline in tax collections and the reduction in financing of petroleum purchases under the PetroCaribe agreement with Venezuela. PetroCaribe financing increased when the price of petroleum was going up.
An indication of the reduced liquidity of the private sector can be seen in the M-1 (the amount of money in circulation) that saw a 5.5% decrease as of 16 February 2009 versus a year ago. Monetary authorities have relaxed some of the economic controls in an attempt to get the economy going again. As reported in Hoy, the reduction in interest rates on Overnight and Lombarda loans is proof of the new policies. Economist Hugo Guillani Cury suggested raising the amount of money in circulation to December 2008 levels.
More... (http://www.dr1.com/index.html#6)