El Siglo reports that the Central Bank has programmed economic indicators so that the issuing of the sovereign bonds does not have a negative effect on the economy. According to Hugo Guilliani, a member of the Monetary Board, the money supply will expand to 17%, but the exchange rate will remain stable, increasing to RD$16.88 from RD$16.66 at present. The Central Bank forecasts a 8.5% inflation rate, and a 5% increase in the Gross Domestic Product. Net reserves are forecast to reach US$845 million once the US$500 million in sovereign bonds is issued. The Central Bank has committed to gradually reduce the exchange commission three months after the bonds are issued. The exchange commission affects all those dealing in foreign exchange. Hugo Guilliani said that a reduced part of the sovereign bonds money would enter this year, with the greater part entering into the economy at the start of 2002. He forecast the US$500 million funds injection will not spur inflation, and on the contrary will strengthen the economy. He stressed the need that the projects in which the funds be used be specified in the bill Congress is studying regarding the issuing of the sovereign bonds. Jose Lois Malkum, of the government department that is in charge of issuing the bonds, has said that the bulk of the money will be used for highways where toll booths will be installed in order to guarantee there are incoming funds to repay the money.
