The Central Bank reported that the Monetary Board authorized the relocation of RD$21,424.4 million of the resources of the legal reserve for the channeling of loans for the construction and acquisition of low-cost housing.
In a statement, the institution specified that at the end of 2022 some RD$21 billion returned to the Central Bank, corresponding to a process of releasing legal reserves, carried out in 2017, for the financing of productive activities.
The resolution approved by the Monetary Board establishes that the released resources will be allocated 80% to the acquisition of low-cost housing and 20% to interim loans for construction.
It indicates that financial entities must channel this financing at an interest rate that does not exceed 9% per year, in terms of up to five years for the acquisition of homes and two years for construction (interim).
The Central Bank explained that currently the value of the legal reserve resources amounts to RD$4.5 million.
The decision was made considering that the construction sector has a high impact on the national economy and has been significantly affected by a turbulent international environment and its effects on market interest rates, registering real growth of barely 0.6% year-on-year in the period January-November 2022.
The monetary authority highlighted that with this decision, the effective legal reserve rate would remain at the levels prevailing before the expiration of the measure adopted in 2017, but that this measure does not modify the current restrictive monetary stance, by leaving the coefficient of interest unchanged. Legal reserve for the different financial intermediation entities.