Writing in Listin Diario, analyst Rafael Tomas Jaime, foresees a slow, inevitable decline in the value of the peso due to the fiscal imbalance caused by the outflow of reserves to pay for petroleum. In September, the first full month following the increase in petroleum-derived products, the Central Bank noted only a DR$3.5 million increase in revenues to cover the DR$54 million of external obligations. So far in 2000, the Central Bank, which was reported yesterday to be purchasing dollars at DR$16.47, has had to give up most of the DR$2.4 billion it had accumulated in reserves in order to fill the gap between the cost of petroleum in the international market and income petroleum products generate in the local market. Throughout the first eight months of the year, the government refused to ease controls on money in circulation, or to devalue the peso, which had been constant for over two years at DR$16.05. With the change in government this past August, and the arrival of a new Monetary Board, elements of macro-economic instability were recognized and a series of corrective measures was instituted, including the increase in the price of petroleum products, and a 2.6% devaluation of the peso. (1 November 2000)
