2005News

International reserves at Central Bank rise sharply

International currency reserves at the Central Bank are up over 460% from last year and are now back at 2002 levels. The El Caribe reports that on 12 January the reserves reached US$639.8 million, up 6% on the 31 December figure, or in money terms, up US$37.6 million. The new levels are also 460% greater than the totals for just one year ago. This increase is largely due to the changes in the exchange rate, and the fact that the government did not need any more hard currency to fulfill their obligations, according to Hector Valdez Albizu, the CB governor. Historically, there is an inverse relationship between the amount of international reserves and the exchange rate: more reserves mean a lower exchange rate. In January of 2004, the international reserves hit just US$114 million and the dollar rose to RD$55. Currently, with reserves at over US$600 million the dollar is being quoted at less than RD$30 to one.