Central Bank governor Hector Valdez Albizu said that international reserves as of 4 February had reached US$804.2 million. El Caribe newspaper points out that this is US$150 million above the level the country should have reached by March. This is up from the level of US$198 million in May 2004.
The average exchange rate during this period declined from RD$44.8 to US$1 in July 2004 to an average of RD$29.10 during the first two weeks in February. El Caribe newspaper reports that the international reserves have a close relationship with the exchange rate of the peso. As the reserves increase, the peso value stabilizes. In the past, the government has used injections of reserves to stabilize any volatility of the peso. The Central Bank highlighted that the increase of the reserves is part of monetary policy that has achieved a reduction in inflation. Inflation in January 2005 was 0.79%, compared to 9.23% in January 2004. This means the DR is on target with the 11-13% annual inflation, the IMF stand by arrangement foresees for year’s end.