Dominican Republic settles US$1.7B debt with IMF: Central Bank

Santo Domingo.- The Central Bank on Tuesday said thecountry’s commitments with the International Monetary Fund (IMF) have been fullycomplied with disbursements related to the Stand-By Agreement signed October 6,2009.

It said through the Agreement, the IMF approved credit to theDominican State of around US$1.7 billion, equal to US$1.09 billion in SpecialDrawing Rights (SDRs); of these only US$1.195 billion (SDR US$766.2 million), weredisbursed ,being available around US$505.0 million (SDR US$328.3 million) ofthe resources initially established.

It said the undisbursed amount resulted from that some ofthe conditionalities set out therein before the deadline weren’t completed. “Theaforementioned Agreement expired on March 8, 2012. Of the total resourcesdisbursed, the share received by the Dominican government was US$856.9 million(SDR US$550.0 million), which the IMF allocated resources to a government tosupport budget for the first time, while the remaining amount of US$338.1million (SDR US$216.1 million) was received by the Central Bank in support ofinternational reserves, which is the usual destination of loans to thatinstitution.”

“It’s important to remember that the main objective of thisagreement with the IMF was to stimulate the recovery of the economy in anenvironment of macroeconomic stability and strengthen our growth prospects,through conducting a counter-cyclical policy in the short term, achievingmedium-term sustainability, and finally to address the effects of theinternational financial crisis of 2007-2009,” the Central Bank said in anemailed statement

“With the balance of this commitment, the country leavesopen the possibility to freely use this type of credit facility with the IMF inthe future,” the Central Bank said.

It adds that thanks to this important milestone, “theauthorities contribute to improve the balance of the external public debt,continuing the process of consolidation of fiscal accounts and internationalreserves, in order to preserve macroeconomic stability that has characterizedthe Dominican Republic during the last years.”