Dom Rep CB Reserves Above $10Bn Mark Again – Policy Rate Decision

• Dom Rep’s Central Bank (CB) reported that international reserves reached $10.5Bn as of September 28 (13.3% of GDP) following the successful sale of global bonds last week. The CB highlighted that it was the largest ever bond transaction executed by a Central American country.
• The CB argued that the recovery in economic activity is being supported by an expansive monetary policy stance. Since late March, the CB has cut the policy rate by 150 basis points (bps) to 3% and injected liquidity for some DOP190Bn (4% of GDP) through a variety of stimulus measures.
• The CB also provided liquidity in USD for an estimated $622Mn. DOP lending rates have decreased to 9.8% from 13.3% in March, and domestic credit to the private sector is now expanding at a 10% YoY pace.
• The CB plans to keep its expansive monetary policy in place during the health emergency and projects that GDP growth will reach its 5% potential growth rate towards the end of 2021.

(Source: Bloomberg)