Reduction of reserves does not help Honduran micro businesses

The reduction of the legal reserves to zero percent that was adopted by the Central Bank of Honduras does not guarantee resources for small businesses.

Monday, November 24, 2008

When the Central Bank lowers the interest rates so that more resources are available in the market, this money does not reach the small producer, but goes to banks which do not lend to small producers because they have no guarantees, bank accounts or profit and loss statements and are therefore excluded from these benefits, the president of the Association of National Industries (ANDI), Adolfo Facusse, lamented.

More on this topic

Honduran Central Bank reduces reserves

November 2008

Starting on December 6, the legal reserves in local currency will be reduced to 0% and will be lowered by five points for deposits in foreign currency.

The measure, announced by the president of the Central Bank, Edwin Araque, seeks to increase liquidity in the financial system by some $251 million (4.8 billion lempiras) which the banks will have available to offer in credit.

Banking Legal Reserve Requirements Reduced in Nicaragua

February 2011

The Central Bank announced that the daily legal reserve requirement will now be 12%, while it now stands at 16.25% weekly.

According to Antenor Rosales, president of the Bank, financial institutions must maintain a minimum reserve of 15% biweekly and a daily minimum reserve of 12%.

Costa Rica: Changes in the Banking Reserves Will Restrict Credit

June 2009

According to Banks, the change in the calculation of the reserve will increase the costs of the financial intermediaries and will reduce the supply of credit.

The Central Bank of Costa Rica modified the methodology used to calculate reserves, implicating that, beginning next July 1st, Banks must have deposited in the Central Bank, at the end of each day, deposits of no less than 97.5% of the minimum legal reserves for the previous month. At the moment this calculation is done based on deposits from 5 days beforehand and it is at 90%.

Honduras announces changes for operations in US dollars

January 2009

The Central Bank announced that it will temporarily suspend all liquid operation in dollars in the banking system.

Latribuna.hn reports: "The purpose of the measures is to alleviate pressure on the short term markets for financing in US dollars.

This was announced yesterday by the president of the Bank, Edwin Araque, who said that they have reduced the monetary policy rate from 9 to 6.75 points."

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