Economic experts believe that an accord with the International Monetary Fund will gradually lower the dollar?s rate of exchange against the peso provided the government employs fiscal discipline and reduces public spending. A testimony to these expectations are similar accords between the IMF and Brazil and Argentina, which provided the desired effects on their respective currencies. Economists Pedro Silverio, who heads the economic think-tank Cenantillas and former business sector association CONEP president Celso Marranzini, as quoted in El Caribe, say that the measures will succeed if the government makes the necessary sacrifices in reducing the public payroll and implementing strict fiscal measures. El Caribe?s main editorial column makes the point that sacrifices will have to take place on all fronts. All parties to the deal know what to do in order to achieve the goal, but the real question is whether they want to achieve it or not, concludes the commentator.
According to Central Bank Governor Jos? Lois Malkum, the injection of US$1 billion into the economy in the first six months will be an important factor, combined with the fact that the country?s economy is showing encouraging tourism and free-trade zone export income, while spending has decreased as a result of the government?s surcharge on import tax earlier this year.
A Central Bank communiqu? says that negotiations with the International Monetary Fund are advanced and that their main topic has been to identify measures aimed at strengthening the Dominican economy, increasing transparency and efficiency in both national and international banking procedures, and minimizing the residual damage of the Baninter collapse. The Central Bank will release full details once the agreement has been signed.
Inter-American Development Bank President Enrique Iglesias arrived in Santo Domingo last night for talks with the Central Bank also to discuss a possible rescue package to diffuse the effects of Baninter?s calamitous demise. On his agenda are meetings with President Hip?lito Mej?a and Central Bank officials, as well as with delegates of the International Monetary Fund currently in the country.