NewsWhore
10-17-2006, 02:30 PM
Commercial banks and savings and loans associations have lowered their passive interest rates by more than 65% over the last two years, while active rates have only dropped by 42%. According to Diario Libre, both rates should move in relatively equal proportions. Passive rates, the ones banks pay savers for their deposits, are currently at an annual average of just 8.4% for one-year investments. In 2004 the average was 24.5% and in 2005 it was 14.5%. This means that a person holding a certificate for RD$1 million for a one-year investment used to receive a RD$20,416 monthly return in 2004. In 2005 this dropped to RD$12,083 and currently they would only be receiving RD$7,000 per month. The report comments that RD$7,000 today has less purchasing power than RD$20,000 two years ago, is spite of the economic recovery. The prices of many consumer goods, with a few exceptions, have gone up as much as 60% in the last 12 months in some cases. Prices have increased gradually, making it slightly less noticeable. Cod for example has risen by 28.4%. Some prices have fallen, like bananas or pork, which has dropped by 54% per pound according to El Caribe, but the price of chicken, which had at one stage experienced a fall, has continued to increase.
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