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Dominican Republic Finance


The public debt, like any private debt likes as individual or business implies a significant risk for the common pocket of the country, since they are resources that we must return adding the so called "interests" which in the economic language is the "interest rate"

 

And many times we can not imagine how this compromises the future life of each of the people living in the country.





 Below we offer some information that, according to economist and professor Antonio Ciriaco Cruz, all people should know about public debt.





Dominican State classifies  


1. That the Dominican State classifies the debt into two broad categories according to the origin of the creditor or to whom it is borrowed in: external and internal.

2. That according to the institution that grants the loan, the debt is subdivided into: Debt of the Public Financial Sector or Debt of the Non Financial Public Sector. The latter is nothing more than commitments as loans assumed by the central government, municipalities, social security institutions, public non-financial companies and other decentralized entities. It's like when we hear it said: IDB finances with US $ 30 million Colonial City Removal Program, that's debt, or when we hear, the World Bank grants US $ 150 million loan to RD, that's more debt.


3. According to the statistics of the Central Bank and the General Directorate of Public Credit, the external debt at the end of December 2017 amounted to US $ 19,124.4 million, and increased US $ 1,122.6 million with respect to December 2016 (6.2% more) for the issuance of Sovereign Bonds.

4. That the interest paid by the Government for each money it borrows varies depending on the entity to which it is requested. If it is with the Multilateral Financing Bodies (call it World Bank, Inter American Development Bank) the weighted average is 3.0%. If it is a Foreign Commercial Bank is 8.3% and if it is to bilateral agencies or countries is 3.5%.

5. That 62.5% of the external public debt corresponds to the debt with the international private sector and most of them holders of sovereign bonds and the remaining 37.5% has been contracted with multilateral and bilateral organizations.

6. That each time the country's debt increases the State's economic capacity to invest in the most urgent problems of the population diminishes.

7. That if the money that the Government has borrowed is not used for development projects roads, dams, ports, electricity, export projects, etc. that increase production and productive capacity of the country, it is creating a unsustainable debt, since it contributes to improving the country's finances.

 

 Dollar against the Dominican peso


In the first three months of this 2018 the value of the dollar against the Dominican peso has shown a slight but systematic rate of increase to the records of the Central Bank.

Government and monetary authorities


  Although the government and monetary authorities have estimated in the General Budget of 2018 that this year the dollar will be $ 50.17, the rhythm that shows the depreciation of the peso against the dollar concerns productive sectors and economic agents.

  Recently, the Dominican Federation of Merchants expressed its fears about the currency movement by calling the attention of the monetary authorities to maintain control over the exchange rate and the levels of inflation in the economy.






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