NewsWhore
03-05-2009, 02:20 PM
The governmental Banco de Reservas has set the prime rate for the farm sector, manufacturing industries, construction, and micro, small and medium-scale businesses at 15% to 17%. The reduction is aimed at stimulating growth in the productive sectors, improving the business climate and promoting economic development.
Bank administrator Daniel Toribio made the announcement during a press conference attended by Central Bank Governor Hector Valdez Albizu. Valdez Albizu says this means a reduction in interest charges of up to 5% on some loans. Valdez Albizu is optimistic that the measure will stimulate commercial banks to follow suit and lower their interest rates.
Furthermore, Toribio said that all the 20-year and up to RD$12 million mortgage loans approved during this month will get a special 15% rate that will be fixed until the end of the year. He said that beginning this year the interest rate will fluctuate with the market. Toribio said that the mortgage policy would involve six-monthly reviews of interest rates where the rates will be modified in accordance with market rates. At the June to December rate, there was an increase of six percentage points, and this was for all the bank's mortgage clients, but it was decided not to collect this, which indicates that there was a 6% reduction in the rates.
Toribio reported that the BanReservas measure was adopted in reaction to the Monetary Board resolution that reduced rates on overnight commercial deposits from 7% to 6%. The first resolution, issued on 12 February establishes that the funds allotted to the productive sectors, some RD$7 billion, should be considered as part of the individual lending banks' legal reserve. Valdez Albizu announced that beginning Thursday (today), earnings on the legal reserves would be transferred to the commercial banks so that they can reduce interest rates on the outstanding loans.
More... (http://www.dr1.com/index.html#5)
Bank administrator Daniel Toribio made the announcement during a press conference attended by Central Bank Governor Hector Valdez Albizu. Valdez Albizu says this means a reduction in interest charges of up to 5% on some loans. Valdez Albizu is optimistic that the measure will stimulate commercial banks to follow suit and lower their interest rates.
Furthermore, Toribio said that all the 20-year and up to RD$12 million mortgage loans approved during this month will get a special 15% rate that will be fixed until the end of the year. He said that beginning this year the interest rate will fluctuate with the market. Toribio said that the mortgage policy would involve six-monthly reviews of interest rates where the rates will be modified in accordance with market rates. At the June to December rate, there was an increase of six percentage points, and this was for all the bank's mortgage clients, but it was decided not to collect this, which indicates that there was a 6% reduction in the rates.
Toribio reported that the BanReservas measure was adopted in reaction to the Monetary Board resolution that reduced rates on overnight commercial deposits from 7% to 6%. The first resolution, issued on 12 February establishes that the funds allotted to the productive sectors, some RD$7 billion, should be considered as part of the individual lending banks' legal reserve. Valdez Albizu announced that beginning Thursday (today), earnings on the legal reserves would be transferred to the commercial banks so that they can reduce interest rates on the outstanding loans.
More... (http://www.dr1.com/index.html#5)