NewsWhore
10-07-2008, 02:30 PM
Former Central Bank governor Bernardo Vega warns that several business deals could fall through this year due to the global financial crisis. As reported in Hoy, Vega said that foreign acquisitions of Dominican companies, investment in tourism projects and real estate purchases are some of the deals that may be put on hold. He says the crisis affects the flow of foreign investment. He also commented that he has reports that tourist bookings for October and November are lower than last year. He added he would be pleased if remittances remained at last year's levels, even if there were no growth. According to Vega, the DR would also feel the effect of reduced ferronickel exports this year. He forecasts that reduced demand in the US will affect contracts awarded to local manufacturing free zones.
Given the expected reduction in hard currency due to drops in tourism, foreign investment, exports and remittances, said Vega, it remains to be seen whether reverse capital flight, with Dominican capital returning seeking higher interest rates in local banks, and the present relief with the declining oil and food prices on international markets, would be enough. Vega made his comments on Channel 11's Telematutino show.
Last week Vega said he was in favor of the DR signing an agreement with the International Monetary Fund as a way of demonstrating willingness to tighten its belt in order to tackle the difficulties that the economic crisis in the US will bring. He said the signing would restore confidence and reiterated the need for the government to reduce public spending.
More... (http://www.dr1.com/index.html#5)
Given the expected reduction in hard currency due to drops in tourism, foreign investment, exports and remittances, said Vega, it remains to be seen whether reverse capital flight, with Dominican capital returning seeking higher interest rates in local banks, and the present relief with the declining oil and food prices on international markets, would be enough. Vega made his comments on Channel 11's Telematutino show.
Last week Vega said he was in favor of the DR signing an agreement with the International Monetary Fund as a way of demonstrating willingness to tighten its belt in order to tackle the difficulties that the economic crisis in the US will bring. He said the signing would restore confidence and reiterated the need for the government to reduce public spending.
More... (http://www.dr1.com/index.html#5)