The Central Bank reports that, for the first time in the past 22 months, there is no need to print money without sufficient reserves. According to El Caribe newspaper, the printing machine of the so-called “inorganicos” has been shut down. On 1 November, the number of certificates of deposits represented RD$2.72 billion more than the Central Bank’s excess funding. The tendency to print money has been a leading source of inflation and is blamed for the peso’s depreciation during 2003 and 2004. The money was printed to make payments to depositors following the collapse of three commercial banks and as a result of government overspending.
According to the Central Bank, internal financing made up by advances and bank discounts, as well as liquidity facilities granted to the financial system, stood at RD$105.8 billion as of 30 October, representing RD$6.85 billion less than in September 2004. Reporter Edwin Ruiz explains that the difference between internal financing and money in circulation becomes the amount of pesos seeking dollars. This, he explains, has considerably declined from the RD$48.4 billion spread in January 2004. At that time the peso depreciated to a record rate of RD$55 to US$1. With the gap closed, however, the peso has rebounded to RD$30 to US$1.