The Vice Governor of the Central Bank, Luis Manuel Piantini said that the Standard & Poor’s analysis of the Dominican economy (see http://www.dr1.com/daily/news100898.shtml) is flawed. He said when commenting on the effects of the low international reserve levels, the economists of the organization did not take into account that 80% of Dominican imports are made with foreign exchange purchased on the free market and not with Central Bank reserves. He explained that thus the level of Central Bank reserves does not affect the private sectors capacity to pay back loans or debts. More so, he said that Standard & Poor data was outdated. He said that as of 6 October the international reserves were US$228 million, or US$17 million more than the US$211 million on the day before the Huricane. He said that the gross international reserves were US$559 million, and that both the net and the gross reserves are at levels of this time last year. He explained that the government uses the Central Bank international reserves exclusively to pay the foreign debt and make fuel purchases. Piantini forecast that the economy will grow 7% this year, down from the original 7.5% forecast, and that inflation should be around 4%. He mentioned that the most dynamic sectors of the economy – tourism industry, manufacturing industry, and telecommunications industry – had not been significantly affected by the hurricane and were bouncing back quickly.
