IMF ensures monetary and fiscal policies have been effective in the Dominican Santo Domingo.
The Central Bank of the Dominican Republic (BCRD) held a virtual meeting with the mission of the International Monetary Fund (IMF), aimed at collecting economic and financial information from the country, in the framework of the annual consultations under article IV of its Articles of Agreement, which is the responsibility of all member countries of that financial organization.
The governor of the BCRD, Héctor Valdez Albizu, informed the IMF mission, headed by the head of mission, Esteban Vesperoni, about the measures that are contributing to a rapid economic reactivation of the country after the negative effects caused by the COVID-19 pandemic, among which he highlighted the liquidity expansion measures taken by the Monetary Board (JM), combined with the Government's social compensation measures.
Valdez Albizu stated that one of the first measures taken by the Monetary Board was to lower the monetary policy rate from 4.50% to 3%, which allowed the overnight rate to stand at 2.5%. It also approved liquidity facilities for banks through repos extended to one month, enabled for extension as financing up to one year, with the guarantee of Treasury securities, BCRD and category A portfolio; the liquidity facilities that were enabled for financing of RD$215 billion (about 5% of GDP), having placed on April 20 about 89,000 loans to different sectors.
He said that, after discussions with the IMF, the quota deposited in the same institution by the Dominican Republic, equivalent to US$ 653 million, which resources were used by the Ministry of Finance to implement programs that help the most vulnerable households and people.
The governor pointed out that due to the effects of monetary and fiscal measures there was a positive change of trend. Already in February, a growth of 1.1% was achieved in real terms and, according to the BCRD forecasting systems, the country is in a position to exceed 5.5%, which would be a great success.
Valdez Albizu also highlighted the behavior of remittances, which in the first quarter of this year reached US$ 2,548 million, thus registering a growth of 50% compared to the same quarter of 2020.
He also highlighted that a level of foreign direct investment of US$ 2,715 million is estimated in 2021, which would cover more than twice the level of current account deficit estimated for this year. He also mentioned that international reserve levels remain historically high, around US$ 12 billion, equivalent to a coverage of approximately 15% of GDP and about 7.5 months of imports.
The governor assured that one of the fundamental keys to the recovery of the Dominican Republic has been to transfer credibility and certainty, both nationally and internationally, so that investments and production are strengthened.
For his part, the head of the IMF mission, Esteban Vesperoni, considered that, after the outbreak of the pandemic, the monetary and fiscal policy response of the Dominican Republic has been effective and decisive in the levels of recovery that are being achieved.
Vesperoni said that "in the perception of the IMF, the reactivation achieved by the country would suggest that DR belongs to a privileged group of emerging economies, more than the average of Latin America (LA)."
The head of the IMF mission pointed out that DR entered the pandemic with strength, in addition to the strategies to facilitate liquidity, support for families, the effort to support the labor market and resources for refinancing.
Analysis carried out by the international organization reveals that recovery would be complex due to the different speeds of restoration in different countries. He expressed concern about the social impact, especially on poverty levels. He also indicated that one of the main challenges for Latin American economies will be to face the debt figures acquired during the pandemic.
Vesperoni concluded the meeting by stating that the International Monetary Fund is ready to begin new work aimed at consolidating the recovery and growth of the Dominican Republic in 2021 and 2022.
The head of the mission was accompanied by Frank Fuentes, alternate director of the Brazilian chair on behalf of the Dominican Republic; Mariana Sans, responsible for social affairs; Pamela Madrid, responsible for fiscal affairs; Dirk Grolleman, representative of the financial sector; Marina Rousset, representative of structural affairs; and Mario Mansilla, for monetary and external affairs.
Present with the governor were the lieutenant governor, Clarissa de la Rocha de Torres; the manager, Ervin Novas Bello; the deputy general manager, Frank Montaño; the deputy manager of Monetary, Exchange and Financial Policies, Joel Tejeda; the deputy manager of National Accounts and Economic Statistics, Ramón González; and the economic advisor of the Governorate, Julio Andújar Sckeker.
There were also the director of the department of Monetary Programming and Economic Studies, Joel González; the director of the Department of Regulation and Financial Stability, Máximo Rodríguez; the director of the International Department, Brenda Villanueva; and the director of the Treasury Department, Yamileh García Belén.
Source:
https://m.elcaribe.com.do/destacado...s-han-sido-efectivas-en-republica-dominicana/
