Most of the commercial paper issued in the Dominican Republic is for a minimum of 90 days. Investors that make this investment are in effect loaning their money to a company for a short-term need. Interest is usually paid monthly with a commercial paper investment and at the end of the 90 days, the principal or initial investment is returned to the investor. When we work with our clients that are interested in the higher yields found in Dominican Peso Investments, we have made special arrangements with the brokers we work with so your monthly interest is automatically credited to your Dominican Peso Bank Savings Account. The commercial paper can also be registered in your name directly or if you prefer, in the name of your corporation, foundation or trust.
Money is a commodity, like oil, silver, bananas or coffee.
When it is in short supply, the price goes up. The price of money is interest rates and when it is in short supply, interest rates are higher. This is the situation in the Dominican Republic and elsewhere. Many companies either need money for a short term need or they do not want to issue longer term bonds and would prefer to continuously re-borrow every 90 days at the prevailing rate. The thinking behind this is that the company will not become locked into a very high rate on a long-term basis if the interest rates come down.