Prime interest rates climbed to 24% as a result of the Monetary Junta recent measures. While the measures are primarily targeted at restricting government spending, the constraining of bank lending funds is affecting credit to businesses and individuals in the DR. This will have a negative effect on business expansion and on sectors such as construction. News reports say that consumer financing has increased to 34%. Last week the government announced it was restricting to last year’s levels money in circulation, and issued new 90-day certificates in order to remove money in circulation. The measures are being implemented due to the increase in petroleum prices. Antonio Espín, president of the Herrera Business Association, said that the measure penalizes productive sectors. The alternative would have been to increase the price of fuel, but this option was discarded for political considerations. The presidential election is scheduled for 16 May 2000.
