The Dominican Republic received 649 million dollars in special drawing rights from the International Monetary Fund (IMF) to support the Central Bank’s international reserves, informed the Central Bank on Wednesday.
The special drawing rights are not a currency, but an international reserve asset, and therefore “cannot be used to pay public debt or finance government spending”, explained the governor of the Central Bank, Héctor Valdez Albizu, in a press release.
In other words, this allocation “is for the exclusive use of strengthening the international reserves of the central banks of the Fund’s member countries”.
In addition to increasing international reserves and strengthening confidence, this allocation of special drawing rights is expected to contribute to stabilizing the exchange market and reducing the impact of exchange rate fluctuations on inflation in the Fund’s member countries, especially the emerging ones.
The SDRs were credited to IMF signatory countries in proportion to their quota shares, so that the Dominican Republic, which holds 0.1% of the total quota, received 457.56 million SDRs, equivalent to some US$649.05 million, the official explained.
As a result of this operation, the country’s gross international reserves, as of August 23, amounted to “the historic level” of 12,798.6 million dollars, equivalent to 14.6% of the gross domestic product (GDP), and to a coverage of 7.4 months of imports.
This exceeds the thresholds of 10% of GDP and three months of imports recommended by the IMF, he added.