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Daily News - 08 October 1998

Major trade exhibitions set staged in Santo Domingo
Expo Europa, the annual exhibition of European goods and services sponsored by the Federation of European Chambers of Commerce, opens today at 8 pm at the convention center of the Dominican Fiesta Hotel. The trade exhibition will then be open from Friday to Sunday, from 10 am to 10 pm. Admission is free.
Coming up is one of the largest trade exhibitions held in the DR every year, the annual Compu Expo, which also will be held at the Dominican Fiesta exhibition halls. This fair that shows the latest in computer technology available to the Dominican market opens at the hotel on 21 October and will last through 25 October. This exhibition is so popular an admission fee is charged.

Americans choose DR vacations
Apple Vacations, one of the leading sellers of tour packages in the United States, is betting on Punta Cana as a leading sun and beach destination for the new millennium. The tour operator sent two million Americans to Cancún, Mexico last year and is now enthusiastically selling Punta Cana hotels.
For starters, the tour operator will send eight flights a week to Punta Cana starting December15 through February 1, and then 10 flights a week through April 15. Three flights a week are scheduled for the summer months.
The tour operator, one of the largest in the US, sees Punta Cana as an alternative to Jamaica and Cancún, destinations to which their travelers have been going for years. Peter Thomas, of Premiere Tours ([email protected]), the local rep of Apple Vacations, says the company is full of enthusiasm for selling the destination.
Thomas told the DR1 that Apple is forecasting Punta Cana could be the next Cancún for the American market.
Other tour operators selling the DR this winter season include Friendly Holidays, GWV, Go Go, and Key Tours.

Felipe Rojas Alou to sign with the Dodgers?
Kevin Malone, general manager of the Los Angeles Dodgers, met with Felipe Rojas Alou in Santo Domingo to discuss Alou becoming the manager of the Dodgers. Alou's team, the Montreal Expos has authorized the talks. Malone and Bob Graziano, president of the Dodgers, traveled to the DR to meet with Alou. It was speculated in the press that Alou was offered a three year US$4 million contract. Felipe Rojas Alou has been the manager of the Expos since 1992. He still has a year to go on his contract with the Expos, but it was said he could join the Dodgers in time for the next Major League season.
The 65-year old manager is recognized for his contributions to the making of such outstanding ball players such as his son Moisés Alou, Larry Walker, John Wetteland, Pedro Martínez, Andrés Galarraga, Marquis Grisson and Mark Lansing among others.

Peso climbs with import frenzy
The Central Bank official market rate is at RD$15.41. Prior to the Hurricane Georges hitting, the official rate for the dollar had been relatively stable at a RD$15.35. Banks had been purchasing dollars for RD$15.25 to RD$15.33 and selling at RD$15.40 to RD$15.65 but a week after the hurricane those needing to buy dollars have to pay up to RD$15.92 and RD$16.03. This means, that exchange houses, that normally offer better rates than commercial banks may be paying the dollar at more than the official RD$15.41 rate.
The increase in the demand, as importers prepare to make foreign purchases of farming produce and construction materials following Hurricane Georges has compounded the situation of September and October, months during which importers buy dollars to restock for Christmas time.
The Central Bank has said that the higher cost of the dollar is temporary, as major US dollar injections in insurance payments and remittances from Dominicans living abroad will balance out the demand.

Dominican Republic's BB/B+ LC/FC Ratings On Watch Negative
NEW YORK, Oct. 1 /PRNewswire/ -- Standard & Poor's today placed its single-'B'-plus long-term foreign currency sovereign and senior unsecured ratings and its double-'B' long-term local currency sovereign credit rating of the Dominican Republic on CreditWatch with negative implications. Standard & Poor's also placed its single-'B' short-term foreign currency rating of the Republic on CreditWatch negative. At the same time, Standard & Poor's affirmed the single-'B' short-term local currency rating of the Republic.
The CreditWatch action reflects the Dominican Republic's fragile external liquidity position that leaves it ill-prepared to face the challenges of reconstruction after Hurricane Georges destroyed much of this year's crop, which represents 14% of GDP and 7% of exports. The country's low level of reserves, estimated at one week's import coverage (including free trade zones) using a pre-hurricane figure of US$168 million for net international reserves, prompted the central bank to seek rescheduling of US$125 million of Paris Club debt service due in the coming three months.
Standard & Poor's expects the ensuing deterioration of the Dominican Republic's trade balance (projected before the disaster to reach 13% of 1998 GDP) to be partly mitigated by increased remittances and payments on insurance premiums, keeping a revised current account deficit below 5%. The Dominican Republic's tourist infrastructure also has not been badly damaged as originally feared.
Standard & Poor's expects the current account deficit to be financed by accelerated disbursements and new money from official creditors and by donor aid. However, the country's external liquidity position is weak: international reserves amount to only 22% of the country's 1999 external financing requirements.
The Dominican Republic's ratings remain constrained by:
-- A delicate external liquidity position, at one week of import coverage.
-- A lack of fiscal flexibility stemming from continued institutional
weaknesses, mounting transfers to loss-making public enterprises, higher fixed costs associated with public salary increases, and existing debt arrears to suppliers accumulated in prior administrations.
-- The expectation of continued legislative standstill on tax and energy reform.
-- A central bank, which under current and proposed legislation, lacks autonomy, thus potentially subjecting monetary policy to political objectives.
 
The ratings remain supported by:
-- Political transition leading toward greater accountability and
decentralization, including improvements in the judicial appointment system, both of which should continue to attract foreign investment and restore private sector confidence;
-- Continuing strength of free-zone areas and tourism, which generate foreign exchange and contribute to dynamic GDP growth;
-- Efforts to improve the policy environment for foreign investment and the development of more traditional sectors of the economy;
-- Improving macroeconomic volatility cycles under the Fernandez administration, including relatively tight fiscal policy and single-digit inflation; and
-- A relatively moderate external debt burden and correspondingly low debt service ratios.
 
Standard & Poor's expects to resolve the CreditWatch action in the coming months. Although this external shock worsens the sovereign's external position, most of the Dominican Republic's other macroeconomic indicators compare favorably with those of other sovereigns in the single-'B' category.
If the government's policy responses are robust and secure adequate official-creditor financing, the ratings could be affirmed at the current level. If the country's net international reserves continue to fall, however, the ratings could be lowered modestly, said Standard & Poor's-- CreditWire.

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