Economist and former governor of the Central Bank, Guillermo Caramwarned this Wednesday that the stock market crash At a global level, this exposes the Dominican Republic to the risk that lenders, instead of granting new loans, choose to collect debts to resolve their own financial crises.
«It can have repercussionsfirst, because if the stock markets fall, a crisis breaks out… When a crisis occurs, investors who bet on the survival of the system can dedicate part of their resources to overcoming it, and that makes it difficult, for example, for a country like ours towhich for the past 20 or 25 years has depended on debt, It is expressed in the sense that they could decide: “No, I am not going to lend to the Dominican Republic anymore because I have to dedicate all my money to resolving the crisis.” So, if the financial doors are suddenly closed to us, not only do creditors stop lending to us, but they also start collecting. Can you imagine if our creditors suddenly start collecting what we owe? Then, Virtually the entire budget would be used to pay off that debt and there would be no resources to invest in public services.“, he explained Wow.
The former official also He mentioned the possibility of the United States entering a recession, “Especially because the Federal Reserve has maintained high rates for a long time, at 5 percent. So, when you have a high basic monetary policy rate, investors do not borrow, production is affected and there is no consumption,” he said.
«I don’t think that the recession in the United States is near, but it is linked to a complicated electoral process that is taking place now, and that is an important factor. Do not forget that the United States, despite all its loss of hegemony, remains one of the main consumers in the world, and that the solvency of The United States is not only based on its reserves in dollars and gold, but also on intangibles: its military and technological power, etc., which is not the case of the Dominican Republic. Here we are given loans if we have dollar reserves, if we have an economic flow or a fiscal situation that allows us to continue paying,” added the economist.
Guillermo Caram also pointed out that The world economy at this moment is very complex and very sensitive.“That is why I insist, perhaps on a domestic level, that we must have an economic intelligence system that allows us to make quick decisions in the face of a conflict situation and review our economic policy scheme: the interest rate, public spending, taxation, because the economic self-sufficiency of a nation is given by fiscal and monetary balance, and prudence in monetary policies,” he said.
The statements of the former governor of central bank They were made during an interview on the television program “El Día,” which is broadcast on Telesistema 11.
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