Change in monetary policy will favor the growth of the national economy, according to ABA

The Association of Multiple Banks of the Dominican Republic (ABA) favored the change in monetary policy stance (TPM) ordered by the Monetary Board and announced by the Central Bank, understanding that It will promote the revitalization of productive activities and, therefore, the growth of the national economy.

“The effectiveness of monetary policy, in coordination with the fiscal policy promoted to reduce and mitigate inflationary pressures with a high component of the global environment, it generates a climate of certainty for local and foreign direct investment”, stated the banking association in a press document, pondering that the statement constitutes a turning point that marks the beginning of the normalization of the monetary policy started in November 2021.

In this regard, the ABA stated that getting inflation to be already within the target range of 4% ±1% Due to the foreseeable and timely measures, it gives monetary policy room to start the path towards lower rates and pointed out that the official provision opens the space for a gradual reduction in bank interest rates.

The union estimated that the announcement of the reduction of the TPM, together with complementary measures that will be adopted by the Monetary Board and the Central Bank in terms of liquidity provision, will facilitate financing to productive sectors and households under favorable conditions, propping up the objective of economic growth in the second half of this year, which is around 4%.

Similarly, it considered that the additional provisions could influence the transmission of reductions in the monetary policy rate to be carried out in a shorter time, through the active and passive interest rates offered by financial entities.

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The ABA estimated that, in this context, productive sectors that have a multiplier effect of wealth and employment will be favoredsuch as construction and MSMEs, which will be able to access credit under better financial conditions, with a positive impact on the return on their investments and the expansion of their business horizons.

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