Dominican Government and IMF Sign New Monitoring Accord

Dominican President Leonel Fernández and his economic team recently signed a monitoring agreement with the International Monetary Fund (IMF).

“the most appropriate situation between the Fund and the country would be a post-program monitoring agreement which is what usually happens when IMF programs are successfully carried out such as has occurred in Brazil and other countries around the world.”

The announcement was made at a press conference at the end of the working breakfast held by President Fernández for IMF representatives, who were headed by IMF Deputy Director Morillo Portugal.

Mr. Portugal explained that this agreement is different than the stand-by, which culminated this past January, “when taking into account that we are in a different phase in the DR because there is no need to respond to an internal crisis such as in the past and there is also no urgent need for financing,” according to a press release from the President’s Office of Information, Press and Publicity.

The IMF Deputy Director said “the most appropriate situation between the Fund and the country would be a post-program monitoring agreement which is what usually happens when IMF programs are successfully carried out such as has occurred in Brazil and other countries around the world.” Portugal said that when the government begins its next session in August, it would be an opportunity to formalize the situation around the new agreement.

Differences Between the Agreements

According to what the IMF deputy director said, there are differences between the past agreement and the monitoring accord. “In the first place, there is no financing on the part of the IMF because the Dominican Republic does not need it now.”

In the second place, Portugal said, there is no formal structure with well-established quantitative goals that have conditions attached at the time of agreement.

There is a significant difference in relation to the stand-by agreements, which only require a fixed 3-month revision period stipulating the very specific goals – quantitative as well as structural – that need to be met. If not, there is also an element of financing and “we think neither is necessary at the moment.”