Dominican Republic: Sectoral Financial Positions and Macroeconomic Vulnerabilities

38 Pages Posted: 9 Dec 2016

See all articles by Svetlana Cerovic

Svetlana Cerovic

International Monetary Fund (IMF)

Jose Saboin

International Monetary Fund (IMF)

Date Written: October 2016

Abstract

This paper examines the financial position of the key sectors of the Dominican Republic. It contributes to macroeconomic surveillance by identifying financial interlinkages and vulnerabilities through the balance sheet approach. The balance sheet of the economy has been weakening, particularly in foreign currency, due to persistent fiscal deficits. Risks arising from weaker foreign currency position, however, seem to be mitigated by long-term maturities on government debt and increasing accumulation of foreign currency assets. Given the strong links of the rest of the economy with the public sector, network analysis suggests that while the financial position of the other sectors of the economy is stronger, they could be adversely affected in an external stress scenario. Exposures to public sector are particularly pronounced in the domestic financial system (directly) and households (indirectly, through pension funds).

Keywords: Economic sectors, Dominican Republic, Balance sheets, Systemic risk assessment, Macro-financial analysis, Time series, balance sheet approach, net financial position, Dominican Republic, financial interlinkages

JEL Classification: F30, F34, H63

Suggested Citation

Cerovic, Svetlana and Saboin, Jose, Dominican Republic: Sectoral Financial Positions and Macroeconomic Vulnerabilities (October 2016). IMF Working Paper No. 16/208, Available at SSRN: https://ssrn.com/abstract=2882643

Svetlana Cerovic (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jose Saboin

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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