Dominican Republic: Sectoral Financial Positions and Macroeconomic Vulnerabilities

October 17, 2016

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Svetlana Cerovic, and Jose Saboin. Dominican Republic: Sectoral Financial Positions and Macroeconomic Vulnerabilities, (USA: International Monetary Fund, 2016) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the financial position of the key sectors of the Dominican Republic. It contributes to macroeconomic surveillance by identifying financial interlinkages and vulnerabilities through the balance sheet approach. The balance sheet of the economy has been weakening, particularly in foreign currency, due to persistent fiscal deficits. Risks arising from weaker foreign currency position, however, seem to be mitigated by long-term maturities on government debt and increasing accumulation of foreign currency assets. Given the strong links of the rest of the economy with the public sector, network analysis suggests that while the financial position of the other sectors of the economy is stronger, they could be adversely affected in an external stress scenario. Exposures to public sector are particularly pronounced in the domestic financial system (directly) and households (indirectly, through pension funds).

Subject: Banking, Currencies, Economic sectors, Expenditure, Financial crises, Financial statements, Money, Pension spending, Public financial management (PFM), Public sector

Keywords: Balance sheet approach, Balance sheet risk, BCRD certificate, Capital structure, Central bank, Creditor position vis-à-vis bank CDs, Currencies, Dominican Republic, Financial crisis, Financial interlinkages, Financial statements, FX position, Global, Liquidity risk, Net financial position, Pension spending, Position vis-à-vis, Public sector, WP

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/208
Stock No:

WPIEA2016208
ISBN:

9781475545494
ISSN:

1018-5941

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