Governor of the Central Bank Hector Valdez Albizu addressed bankers in Coral Gables, Florida last week to explain the economic situation of the country and assuage fears of instability or arrears on the regular foreign debt payment plan. Valdez sought to bolster confidence in investments in the DR. The nation’s principal monetary authority emphasized that the Dominican Republic would continue to honor its international monetary commitments. Valdez emphasized that the DR has not requested a restructuring of its foreign debt and neither a moratorium on payment of its foreign debt. The restructuring has been requested on base of international solidarity and cooperation due to the RD$3,500 million extraordinary reconstruction effort the government is having to enfold after Hurricane Georges. Present at the same meeting, the Technical Secretary of the Presidency, Temístocles Montás said that the Club of Paris has accepted the government’s request for a six month reprogramming of the US$109 million payment on the foreign debt that should have been made 30 September. The moneys will be paid in March 1999. The government says that the Club of Paris accepted the government’s request with no conditions. He explained the Fernández administration has made payments of US$423 million on the foreign debt in the past two years, reducing the later from US$3,875.1 million at June 1996 to US$3,452.1 million at June 1998. While in 1994 the servicing of the foreign debt demanded 5.6% of the Gross Domestic Product, today only 2.7% is paid out. Same, in 1994, the debt payment represented 18.7% of the total exports of goods and services, today debt service is 5.6% of the total. Speaking to the bankers at the Hyatt Regency of Coral Gables, Miami, Valdez pointed out that regardless of the effects of the hurricane, the economy will still have grown 7% at year’s end, down only half a percentage point from the original forecast of 7.5%. Valdez forecast that the inflation rate for the year is estimated at 6%. Valdez explained that while the hurricane will have a negative effect on several sectors of the economy, such as farming, other sectors will grow more than originally estimated. Sectors to experiment greater dynamism are construction, 14%; transport, 10.9%; commerce 10.8%, government, 5.5%; and finance, 3.8%. Valdez also mentioned that the gross international reserves of the Central Bank will be more than US$600 million at year’s end, and that net international reserves will be at a higher level than in 1997, at US$255 million.
