Central Bank defends policies

[NewsWhore]

The Central Bank of the Dominican Republic has issued a press release defending its economic and monetary policies. The bank said that its handling of the economy that has been hit by external factors, responds to a "strategy" designed to react to international events. The Central Bank is facing a series of unforeseen events that includes the slowdown in the United States' economy, high oil and food prices and higher prices for raw materials. The bank said that "in a small economy, open to international trade such as the Dominican economy, these blows from outside are transferred to increased prices for consumer goods and services." The bank's policy is aimed at reducing the impact of these events. This was the bank's response to criticism that came from the National Council for Private Business (CONEP). According to the Central Bank, the reduction of the money supply will restrict inflation, and it rejected claims that there is a lack of liquidity in the system.
Conep has called for major structural changes and has criticized the way in which governmental monetary policies have stimulated imports, leading to an increase in the deficit in the current account of the balance of payments, which is expected to reach US$4 billion this year. Conep says that policies have favored the telecom, energy and financial sectors, which grew 106% over the past seven years, compared to just 23.6% growth in the tourism, industry, mining, farming, free zones and construction sectors over the same period.

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