Press Release: IMF Deputy Managing Director Carstens Issues Statement on the Dominican Republic

January 23, 2004

Mr. Agustín Carstens, Deputy Managing Director of the International Monetary Fund (IMF), today made the following statement:

"The management of the IMF will recommend to its Executive Board that it complete the first review of the economic program of the Dominican Republic supported by the two-year Stand-By Arrangement with the Fund (see Press Release No. 03/147). Completion of the review would enable the country to draw on SDR 43.78 million (US$66 million). It is expected that the Executive Board will consider the review by mid-February.

"The revised program proposed by the Dominican authorities is designed to address the deviations from the economic program that emerged soon after the approval of the Stand-By Arrangement with the IMF. It seeks to strengthen the fiscal position, provide for a more stable monetary environment, ensure a foreign exchange market free of administrative interference, strengthen the situation of the electricity sector, and continue with the process of banking reform.

"In recent weeks, significant progress has been made in implementing this agenda. Congress has approved the 2004 budget with a view to significantly strengthening public finances in the months ahead. Monetary policy has been set to ease pressures on the currency and reverse the trend of rising inflation. Steps have been taken to unify the foreign exchange market and to ensure that it operates free of interference. At the same time, financing assurances have been obtained from the Paris Club.

"We are hopeful that these policies, properly implemented, will help stabilize the economy and alleviate the adverse social consequences of the recent crisis."


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