The Central Bank of the Dominican Republic is the decentralized State institution that has the power to issue notes and coins, as well as control the level of money that should circulate in the national economy.
This central body was created under the promulgation of law number 1529 dated October 9, 1947. The promulgation of this law was made by the then dictator Rafael Trujillo Molina. More, it is from October 23 of the same year, when the Central Bank formally began operations. The headquarters of the Central Bank is in Santo Domingo de Guzmán, which is the capital of the Dominican Republic. The constitution of the Dominican Republic, tacitly, consecrates full autonomy to the Central Bank.
The Dominican nation has created a monetary and financial law, through which the central bank is governed. The Central Bank is governed by a higher body, which is called the Monetary Board of the Dominican Republic. This monetary board then constitutes the highest authority of the Central Bank.
In short, it is the central agency that has control of the financial activity of the Dominican nation.
Historical background of the Central Bank
It should be noted that the organic law number 1529 that gave rise to the Central Bank, was in force until December 29, 1962, date on which it was repealed by law number 6142. Plus this last law remained in force until 3 December 2002. So that at present the central agency is governed by the Financial and Monetary Law with number 183-02 promulgated on December 21, 2002.
The structure of the Central Bank
This central bank has a distinctive structure and conformation. It has a higher body, which is the Monetary Board. This monetary board is made up of nine members. Meanwhile, it is the objective power of the nation that names its members.
In detail, there are three members who are ex-officio.
- The central bank governor
- The Secretary of State for Finance.
- Super Bank Manager
Adding the existence of 6 more members, which must be of recognized experience in monetary, credit and exchange matters.
Functions of the Central Bank of the Dominican Republic
This institution plays a key and fundamental role in the economy of the Dominican Republic. Therefore, he has full power to exercise a set of functions and powers that have been given to him. Thus its functions are as follows:
- Issue bills and coins of legal tender in the country.
- Execute the monetaryand exchange rate policy of the country.
- Control the monetary system.
- Adequately regulate the financial system.
- Monitor the exchange system.
- Keep and publish the statistics of the economy.
- Manage the country’s international reserves.
- Manage the contingency fund established by the Monetary and Financial Law.
- Perform supervision and settlement of payment systems, as well as the interbank market.
- Propose to the Monetary Board the projects of monetary and financial regulations in monetary, exchange and financial matters.
- Analyze the Dominican financial system as a whole.
- Impose penalties for deficiency in the legal reserve, breach of the rules of operation of payment systems.
- Promote the liquidity and solvency of the banking system of the Nation.
- Create the conditions to maintain the external value and the convertibility of the national currency.
- Carry out the exchange operations that are in charge of the laws in force.
- Perform any other functions attributed to it by the Law.