Yesterday, the Executive Directorate of the International Monetary Fund (IMF) unanimously approved the first and second reviews of the stand-by arrangement with the DR, making the country eligible to receive between US$320 and US$327 million that could contribute to reducing and stabilizing the foreign exchange rate. This is unofficially expected to consolidate international reserves as a result of the confidence that an organization like the IMF inspires. Positive consequences that will derive from the new agreement are greater trust of international investors and an improved country-risk classification. A government source informed Diario Libre that the IMF was influenced by the prudence, the fiscal and monetary policies of the government, and the express willingness of the authorities to comply with reforms established in the letter of intent.
Commenting on the matter, Franco Uccelli of Bear Stearns writes: “The Fund’s actions, which were widely expected, validate the Dominican Republic’s recent economic performance and current policy priorities. They also pave the way for the disbursement of US$327 million in multilateral credits between now and year-end, moneys that will be used to strengthen the country’s international reserve position and should help ease pressure on the local currency.”