The Monetary Board of the DR gave the government its go ahead to issue US$500 million in sovereign bonds, said Central Bank Governor, Frank Guerrero Prats. Guerrero said the bonds will increase the Central Bank’s international reserves and the liquidity of the economy, as well as contribute to a reduction in interest rates. Guerrero says regardless of the sovereign bonds, Dominican indebtedness will continue to be low by regional standards. He said the bonds will bring the percentage of the foreign debt of the Gross Domestic Product from 17.8% to 19%, the lowest in the Americas. He said the foreign debt as a percentage of exported goods and services would go from 41.2% to 42.5%. He said the foreign debt per capita would go from US$430 to US$478, the third lowest in the continent. On the positive side, the funds would permit government investment in construction to increase from 1.3% to 3.6% of the GDP, which would stimulate the economy while it improves public finances. The government proposes to use the money for the reconstruction of Avenida Jacobo Majluta, repairs to Duarte Bridge, construction of the bridge parallel to Duarte Bridge, expansion of the Las Americas Highway, construction of the Circunvalación Norte in Santiago, expansion of the Autovía del Este to Punta Cana, construction of the Cardon-Barahona highway and the Duarte Highway-Rancho Arriba highway as well as the Hato Mayor-El Puerto highway. The bonds would be issued by J.P. Morgan, Morgan Stanley Dean Witter, Salomon Smith Barney (Citigroup), Merrill Lynch, Bear Sterns in the US, and BNP Paribas, Deutsche Bank, UBS Warburg, ABN Amro in Europe.
