The Governor of the Central Bank, Frank Guerrero Prats, said yesterday at the American Chamber of Commerce monthly luncheon that "the worst is over." He said that now efforts are needed to maintain the economic growth the nation has sustained for the past several years. He said in the first trimester of the year the international reserves were US$373 million – a level that he says allows for sufficient liquidity in a time of low inflation and a stable exchange rate. Guerrero also predicted that foreign investments to the tune of US$1,100 million will be made in the DR this year. He broke this investment down into: Energy, US$351 million; Communications, US$300; Commerce & Industry, US$179 million; Tourism, US$117 million; Finances, US$88 million; Free Zones, US$51 million; and Others, US$15 million. He said the Central Bank is working gradually towards unifying the money exchange markets. Sectors have complained that the exchange rate does not reflect the lesser value of the peso. Guerrero said that preliminary GDP data shows the economy has absorbed the shock of the fiscal adjustments made at the start of the year and is now in a process of recovery. "Ladies and gentlemen, the worst is over," said Guerrero. "Now what we have to do is design and implement consistent monetary and fiscal policies that guarantee an attractive climate for domestic and foreign investment and stimulate growth and job creation," he said. Guerrero pointed out that the current debt at US$586.3 million, or 17.5% of the National Budget, is a heavy burden on the economy. He said the government is paying on its foreign debt almost as much as it is spending on education and much more than for public health. He said the authorities are studying several solutions to the problem. They include issuing sovereign bonds or issuing a global bond to replace the restructured debt that dates back to 1994. The idea behind the latter is to reduce interest rates and achieve better payment terms. A third option is to restructure the debt with the Club of Paris. Guerrero said, "The principal objective of the monetary policy in 2001 is to inject the economy with the necessary liquidity, promote a drop in interest rates and keep inflation under 8%."
