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Press Release: Statement by IMF Managing Director Rodrigo de Rato on the Dominican Republic
April 21, 2005
Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), addressed the following letter about the Dominican Republic to Members of the Financial Community on April 20, 2005:
"The economic program of the Dominican Republic for 2005-06 seeks to re-establish macroeconomic and financial stability, while creating conditions for sustainable growth over the medium term. Key elements of the program include a substantial fiscal adjustment and structural reform measures to address the wide range of institutional changes and governance issues in the public sector and financial system. The economic program is being supported by a 28-month Stand-By Arrangement, approved by the IMF's Executive Board on February 1, 2005, as well as assistance from the World Bank, the Inter-American Development Bank, and bilateral creditors, in particular Paris Club members.
"The authorities have announced a bond exchange offer that aims to help solve the country's short-term liquidity problem in a manner consistent with medium-term debt sustainability. Discussions are also well advanced on rescheduling external private bank loans and suppliers credits to the Dominican Republic. A successful bond exchange and rescheduling of debts to external banks and suppliers will depend on high participation rates to secure financing assurances for the Fund-supported program. Successful completion of these private debt restructurings is also necessary to fulfill the country's commitment to seek comparable treatment from private creditors in line with the requirements of the Paris Club's 2004 rescheduling, as well as a precondition for additional Paris Club debt relief in 2005-06.
"The authorities of the Dominican Republic are aware of the challenges ahead and have reaffirmed their determination to address remaining macro-economic imbalances and deepen structural reforms to restore financial stability and put the economy on a path of sustained and high growth. In addition to continued support from international financial institutions and other official creditors,the success of the authorities' program will depend on the participation of the Dominican Republic's private creditors," Mr. de Rato said.
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