 | |
 Central Bank of the Dominican Republic | |
| Headquarters | Santo Domingo |
|---|---|
| Established | October 9, 1947 (1947-10-09)[1] |
| Ownership | 100%state ownership[2] |
| Governor | Héctor Valdez Albizu |
| Central bank of | Dominican Republic |
| Currency | Dominican peso DOP (ISO 4217) |
| Reserves | 5 240 million USD[2] |
| Website | www |
TheCentral Bank of the Dominican Republic (Spanish:Banco Central de la República Dominicana,BCRD) was established by the Monetary and Banking Law of 1947 as thecentral bank of theDominican Republic, responsible for regulating the country'smonetary andbanking system. The Bank's headquarters is in Santo Domingo, and its current governor isHéctor Valdez Albizu.[3][4]
Organic Law no. 6142 of December 29, 1962, authorized the central bank to promote and maintain favorable monetary,foreign exchange andcredit conditions for the stability and development of the national economy. The central bank's functions include regulating market liquidity levels by: determining deposit reserve requirements for banks; implementing lending limits when necessary; and issuing negotiable securities. Additional functions include controlling movements of theexchange rate and introducing resolutions pertaining to the financial system.
The BCRD implements all changes to banking regulation proposed by the Monetary Board (Junta Monetaria) which is the highest body of authority within the institution. The Board consists of ten members, all of which are appointed by the executive. The governor of the central bank heads the Monetary Board while the Ministry of Finance and the Ministry of Industry and Commerce each have a seat on the Board. The BCRD Governor is appointed by the executive for a period of two years, though withHéctor Valdez Albizu there has been continuity at this senior post for several years despite political administration changes. Albizu was the BCRD governor from 1994 until 2000, again holding the post from August 2004.[citation needed]
Since late 1993, BCRD has worked with the sponsorship of theInter-American Development Bank to improve several areas of banking practice.[5]
Monetary policy during the 1990s was conducted within a framework of limited central bank autonomy and a managedfloating exchange rate regime. A key objective of the BCDR was price stability in conjunction with real output growth and reserve accumulation, such that the stock of BCRD net domestic assets became the targeted policy instrument.Liquidity was managed directly throughcredit controls and freezing asset reserves. BCRD also intervened in the private foreign exchange market, smoothing the volatility of the exchange rate. However, the monetary authorities recently moved towards theinterest rate as its indirect monetary policy instrument, namely through issuing central bank paper (certificados de participacion), with prices determined atauction.
Themacroeconomic situation suffered a major shock in 2003 with the banking crisis and subsequent bail out by the BCRD, which guaranteed allBaninter (one of the major banks that failed) deposits and providing liquidity to two other banks at a total cost to the budget equivalent to 21 percent of theGDP. The banking crisis led to a majorcapital flight, a sharp currencydepreciation, highinflation and significantfiscal pressures (exacerbated by an ongoing electricity crisis), together creating large macroeconomic imbalances and an environment of uncertainty and perceived risk. In October 2003 the BCRD raised the commission on foreign exchange transactions for purchasing imported goods to 10 percent and subsequently to 13 percent at the beginning of 2005.[6]
