The Central Bank has issued RD$5 billion in certificates of deposit in the past four months and intends to auction an additional RD$2 billion on Monday. The interest rate for the certificates, however, has yet to be revealed. Ostensibly, the plan is to freeze the money in the Central Bank and in so doing control the exchange rate. This logic relies on a basic economic strategy: by cutting the supply of pesos to the market, the peso should gain value and lessen the disparity between it and the US dollar. Economic analysts observe that the drawback to using the tactic is the increased interest rate for pesos that can be expected. In other words, the government wants to control the exchange rate at the cost of sacrificing interest rates for commercial and personal loans. Interest rates are currently between 30 and 40 percent.
