The governor of the Central Bank says that the net reserves in US currency of the Bank have increased from US$197.3 million in August to US$300 million. Reserves had dropped due to the increasing cost of petroleum imports. The differential between the cost of petroleum and the price of fuel locally is used to pay for the foreign debt. Since the price of fuel locally stagnated due to the electoral period while world market prices for petroleum soared, the petroleum differential declined, thus the reserves were used to make debt payments, depleting these to record lows. With the new price of petroleum locally, the reserves have again started to climb. Frank Guerrero Prats, governor of the Central Bank, spoke during the event to start the Mesa de Dinero, or Money Table, whereby bankers will meet several times a week to analyze interest rates and the exchange rate. The idea is that banks with extra liquidity will aid other banks that have shortness of funds for lending. During the event, Jose Manuel Lopez Valdes, president of the Dominican Republic Commercial Banks Association said that there has been an improvement in bank liquidity as a result of the increase in international reserves. He said that if this situation is maintained, interest rates, at a five-year high, should start to decline. The governor of the Central Bank, Frank Guerrero Prats is optimistic that if petroleum prices continue between the US$25 and US$28 levels, and with the approval of the economic measures in Congress, the situation of the economy next year should be excellent. He emphasized that the reserves are growing again. He said that the government authorities will work with private banks so that interest rates start to decline. He explained that the Money Table seeks to level commercial bank liquidity with the needs of the economy. The Monetary Board in a meeting on 14 December approved the mechanism. The Money Table will monitor daily transactions in the interbank market and will act as an intermediary of the surplus of liquidity in the banks participating in the Table. The new mechanism will also improve communication between the banks and the Central Bank.
