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Dominican Republic: Caram favors a reactivation of production, thus avoiding a rise in the dollar

The economist and leader of the Social Christian Reformist Party (PRSC), Guillermo Caram, favored yesterday that the Government continue to reactivate productive activities as an alternative to avoid the increase in the exchange rate.

He estimated that the financial facilities granted by the Central Bank to reactivate the economy, via commercial banks, must find fully open production companies that receive it.

“These financial facilities will not reach the economy with companies closed or open by 25% or 50%; inducing the temptation to use these facilities to dollarize, that is, buy dollars with the available pesos to protect their assets, if the banks receive it and do not lend it to companies or companies receive it and do not spend it, “said the economist.

In these terms, Caram referred to the behavior exhibited by the foreign exchange market and the social isolation measures adopted to avoid the spread of covid-19, which has generated more than 300,000 deaths and nearly six million infections.

He affirmed that the rise in the dollar will not stop until the government lifts the ban on production and encourages production by requiring companies to adopt and strictly comply with health protocols.

“Companies paralyzed or producing at 25% or 50% of their capacity means less production. Less production means less exports, less entry of less dollars. And more imports, increased demand for dollars, “he said.
He also referred to threats of fiscal deficit increases dissipating.
“More deficit means that the government is spending more than it should in relation to its collections. In this case much more than before, which in itself was a deficit tax system, “explained the political leader.

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