Dominican Republic - Banking and securities

The Central Bank of the Dominican Republic (Banco Central de la República Dominicana-BCRD) is the sole bank of issue. The state-owned Banco de Reservas, established in 1941, is the largest commercial bank in the country and acts as the fiscal agent and depository for the government. The Agricultural and the Industrial Credit Bank promotes the development of agriculture as well as industry by granting medium-term and long-term credit. The National Housing Bank (Banco Nacional de Vivienda) is a primary investor in low-cost housing. Other commercial banks include the Bank of Nova Scotia, Citibank, Banco Nacional de Credito, Banco Intercontinental (BANINTER), Banco Mercantil, Banco Osaka, Banco Global, Banco Hipotecario Dominicano (BHD), Banco Domingo del Progreso, Banco Popular Dominicano, and Banco Santa Cruz.

At the end of January 1996, the central bank tightened reserve requirements for lending based on new deposits and imposed limits on new lending to the commercial sector. The prime lending rate, which had fallen from 24% in December 1995 to 17% in 1996, was 18% in 1999. The exchange rate was devalued 9% in 1998, and continued to devalue through that year, but stabilized in 1999. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $2.4 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $7.9 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 13.47%.

Securities are traded on the Santo Domingo Securities Exchange, founded in 1991.

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