Dominican Republic-IMF "monitoring agreement" sets no conditions

Dominicantoday.com, Santo Domingo , June 25 th 2008

Dominican Republic will sign a " monitoring agreement" with the International Monetary Fund (IMF). The pact doesn't imply the contributions of funds, structural revision of quantitative goals nor the conditionalities of a Stand-By agreement.

The information was provided after meeting between President Leonel Fernandez, IMF assistant director Murilo Portugal and the Government's Economic Team. From now on the government will submit the country's economic, monetary and fiscal policy program to the international financial organism, twice a year, for monitoring .

Economic Team chief Temístocles Montas said the new plan will allow "keeping a close relationship with the International Monetary Fund."

Also reviewed during the meeting was the international situation sparked by price increases in oil and foods.

The IMF representative said the external panorama is "not an easy situation" and to manage it recommended that the authorities maintain the macroeconomic stability, confront inflation and to conduct a fiscal revision which allows maintaining strong, sustainable forms of growth in the Dominican economy.

Portugal said there is a need to think about how the negative impact the wave of increases in the price of fuels and raw materials used in food processing is going to affect the poorest citizens.

Interviewed after the meeting in the National Palace, Portugal cautioned that while "for the most advanced countries it's only a problem as far as inflation," for nations such as the Dominican Republic it's also "a problem of balance of payments, which if it's not handled well, can also be an important social problem."

He said it's important to take on the topic of the crisis in several dimensions, although he's confident the government is "very aware of all the aspects.”

The official said thanks to the public policies implemented in the last three years, " Dominican Republic is strong to face these winds that now blow from the international economy."