[DR1] Bear Stearns on the economy

[NewsWhore]

Bear Stearns analyst Franco Uccelli reports on the appreciated value of the peso, which recently reached its strongest level since the beginning of 2006 and is currently trading at around 32 pesos per dollar. This strengthening is attributed to increased foreign investment, higher levels of tourist arrivals and the fact that the Central Bank and the government have enough hard currency to meet their external obligations without having to source dollars. Uccelli adds that another possible cause is the restrictive monetary policy being implemented by the Central Bank, resulting in the contraction in the size of the monetary base and a reduction in inflationary pressures. He indicates that inflation in February was negative (-0.12%) and negligible in March (0.09). Net international reserves have been boosted by US$50 million so far this year to US$1.57 billion, more than half the increase forecast for the entire year. Stability continues to be expected in the DR and Bear Stearns has an outperform recommendation on the credit.

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