Obbligazione República Dominicana 7.5% ( USP3579EAH01 ) in USD

República Dominicana

100 USD ▲

Rep. Dominicana

USP3579EAH01 ( in USD )

7.5% per anno ( pagato 2 volte l'anno)

05/05/2021 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione Dominican Republic USP3579EAH01 in USD 7.5%, scaduta

100 000 USD

1 500 000 000 USD

P3579EAH0

La Repubblica Dominicana è una nazione caraibica che offre spiagge mozzafiato, una ricca storia, una cultura vibrante e una biodiversità straordinaria.

The Obbligazione issued by República Dominicana ( Dominican Republic ) , in USD, with the ISIN code USP3579EAH01, pays a coupon of 7.5% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 05/05/2021

O F F E R I N G M E M O R A N D U M

US$750,000,000
The Dominican Republic
7.500% Amortizing Bonds due 2021
___________________
The bonds will bear interest at the rate of 7.500% per year. Interest on the bonds will accrue from May 6, 2010 and is
payable on May 6 and November 6 of each year, beginning on November 6, 2010. The bonds will mature on May 6, 2021.
Payments of principal on the bonds will be made in three equal installments on May 6, 2019, May 6, 2020 and May 6, 2021. The
bonds are not redeemable prior to maturity.
The bonds will be general, direct, unconditional, unsubordinated and unsecured obligations of the Republic and will
rank equally with all other existing and future unsubordinated and unsecured obligations of the Republic. The bonds will be
backed by the full faith and credit of the Republic.
There is currently no market for our bonds. The Republic has applied to list the bonds on the Official List of the
Luxembourg Stock Exchange and for trading on the Euro MTF market of the Luxembourg Stock Exchange. This offering
memorandum constitutes a prospectus for the purpose of the Luxembourg law dated July 10, 2005 on Prospectuses for
securities.

Investing in the bonds involves risks. See "Risk factors" beginning on page 7.
___________________
The bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the
"Securities Act", or the securities laws of any other jurisdiction. The bonds will be offered only to qualified institutional buyers
in the United States under Rule 144A of the Securities Act and to persons outside the United States under Regulation S of the
Securities Act. Prospective purchasers that are qualified institutional buyers are hereby notified that the sellers of the bonds may
be relying on an exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A under the Securities
Act. Outside the United States, the offering is being made in reliance on Regulation S under the Securities Act.
___________________
Price for bonds: 100.00% plus accrued interest, if any, from May 6, 2010.
The initial purchasers expect to deliver the bonds to purchasers on or about May 6, 2010 only in book-entry form
through the facilities of The Depository Trust Company, Euroclear and Clearstream, Luxembourg.
___________________
Barclays Capital
Citi
___________________

April 29, 2010

You should rely only on the information contained in this offering memorandum. The Republic has not
authorized anyone to provide you with different information. You should not assume that the information
contained in this offering memorandum is accurate as of any date other than the date on the front of this
offering memorandum.
TABLE OF CONTENTS
Notice to Prospective Investors in the United States .................................................................................................... ii
Notice to New Hampshire Residents Only .................................................................................................................. iii
Notice to Prospective Investors in the United Kingdom.............................................................................................. iii
Enforceability of Civil Liabilities................................................................................................................................ iii
Defined Terms and Conventions ...................................................................................................................................v
Forward-Looking Statements .......................................................................................................................................vi
Summary........................................................................................................................................................................1
The Offering ..................................................................................................................................................................5
Risk Factors ...................................................................................................................................................................7
Use of Proceeds ...........................................................................................................................................................12
The Dominican Republic.............................................................................................................................................13
The Economy...............................................................................................................................................................20
Balance of Payments and Foreign Trade .....................................................................................................................53
The Monetary System..................................................................................................................................................65
Public Sector Finances.................................................................................................................................................83
Public Sector Debt.......................................................................................................................................................94
Description of the Bonds ...........................................................................................................................................107
Book-Entry Settlement and Clearance.......................................................................................................................117
Transfer Restrictions..................................................................................................................................................121
Taxation.....................................................................................................................................................................124
Plan of Distribution ...................................................................................................................................................127
Official Statements ....................................................................................................................................................130
Validity of the Bonds.................................................................................................................................................130
General Information ..................................................................................................................................................130
Appendix -- Global Public Sector External Debt .................................................................................................... A-1
i

This offering memorandum has been prepared by the Republic solely for use in connection with the proposed
offering of the securities described in this offering memorandum. This offering memorandum does not constitute an
offer to any other person or to the public generally to subscribe for or otherwise acquire securities. You are authorized
to use this offering memorandum solely for the purpose of considering the purchase of the Republic's bonds and only
for the purposes for which it has been published. Distribution of this offering memorandum to any person other than
the prospective investor and any person retained to advise such prospective investor with respect to its purchase is
unauthorized, and any disclosure of any of its contents, without the Republic's prior written consent, is prohibited.
Each prospective investor, by accepting delivery of this offering memorandum, agrees to the foregoing.
After having made all reasonable inquiries, the Republic confirms that:
o the information contained in this offering memorandum is true and correct in all material respects and is
not misleading as of the date of this offering memorandum;
o changes may occur in the Republic's affairs after the date of this offering memorandum;
o certain statistical, economic, financial and other information included in this offering memorandum
reflects the most recent reliable data readily available to the Republic as of the date hereof;
o the Republic holds the opinion and intentions expressed in this offering memorandum;
o the Republic has not omitted other facts the omission of which makes this offering memorandum, as a
whole, misleading; and
o the Republic accepts responsibility for the information it has provided in this offering memorandum and
assumes responsibility for the correct reproduction of the information contained herein.
In making an investment decision, prospective investors must rely on their own examination of the Republic
and the terms of the offering, including the merits and risks involved. Prospective investors should not construe
anything in this offering memorandum as legal, business or tax advice. Each prospective investor should consult its
own advisors as needed to make its investment decision and to determine whether it is legally permitted to purchase
the securities under applicable legal investment or similar laws or regulations.
The Republic has furnished the information in this offering memorandum. You acknowledge and agree that
the initial purchasers make no representation or warranty, express or implied, as to the accuracy or completeness of
such information, and nothing contained in this offering memorandum is, or shall be relied upon as, a promise or
representation by the initial purchasers. This offering memorandum contains summaries believed to be accurate with
respect to certain documents, but reference is made to the actual documents for complete information. All such
summaries are qualified in their entirety by such reference. Copies of documents referred to herein will be made
available to prospective investors upon request to us or the initial purchasers.
The distribution of this offering memorandum and the offering and sale of the bonds in certain jurisdictions
may be restricted by law. The Republic and the initial purchasers require persons into whose possession this offering
memorandum comes to inform themselves about and to observe any such restrictions. This offering memorandum
does not constitute an offer of, or an invitation to purchase, any of the bonds in any jurisdiction in which such offer or
sale would be unlawful.
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES
Neither the U.S. Securities and Exchange Commission ("SEC") nor any state securities commission has
approved or disapproved of these securities or determined if this offering memorandum is truthful or complete. Any
representation to the contrary is a criminal offense.
The bonds are subject to restrictions on transferability and resale and may not be transferred or resold except
as permitted under the Securities Act and the applicable state securities laws pursuant to registration or exemption
ii

therefrom. As a prospective purchaser, you should be aware that you may be required to bear the financial risks of this
investment for an indefinite period of time. Please refer to the sections in this offering memorandum entitled "Plan of
Distribution" and "Transfer Restrictions."
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE
HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ("RSA")
WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE IMPLIES THAT
ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT ANY EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE
HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR
GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE,
OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM
The bonds may not be offered or sold to any person in the United Kingdom, other than to persons whose
ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for
the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments
(as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom.
______________
ENFORCEABILITY OF CIVIL LIABILITIES
The Republic is a sovereign state. Consequently, it may be difficult for investors to obtain or realize in the United
States or elsewhere upon judgments against the Republic. To the fullest extent permitted by applicable law, including
the limitation mandated by the Constitution of the Dominican Republic which submits to Dominican Law and
Dominican Courts all agreements executed between the Dominican Government (and any Public Entity) with foreign
entities or individuals domiciled in the Dominican Republic, the Republic will irrevocably submit to the non-exclusive
jurisdiction of any New York state or U.S. federal court sitting in The City of New York, Borough of Manhattan, and
any appellate court thereof, in any suit, action or proceeding arising out of or relating to the bonds or the Republic's
failure or alleged failure to perform any obligations under the bonds, and the Republic will irrevocably agree that all
claims in respect of any such suit, action or proceeding may be heard and determined in such New York state or U.S.
federal court. The Republic will irrevocably waive, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any suit, action or proceeding and any objection to any proceeding whether
on the grounds of venue, residence or domicile. To the extent that the Republic has or hereafter may acquire any
sovereign or other immunity from jurisdiction of such courts with respect to any suit, action or proceeding arising out
of or relating to the bonds or the Republic's failure or alleged failure to perform any obligations under the bonds
(whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise), the Republic has, to the fullest extent permitted under applicable law, including the U.S. Foreign
Sovereign Immunities Act of 1976, irrevocably waived such immunity in respect of any such suit, action or
proceeding; provided, however, that under the U.S. Foreign Sovereign Immunities Act of 1976, it may not be possible
to enforce in the Republic a judgment based on such a U.S. judgment, and that under the laws of the Republic, the
property and revenues of the Republic are exempt from attachment or other form of execution before or after
judgment. See "Description of the Bonds--Governing Law" and "--Submission to Jurisdiction."
Notwithstanding the preceding paragraph, the Republic has not consented to service or waived sovereign
immunity with respect to actions brought against it under the U.S. federal securities laws or any state securities laws.
In the absence of a waiver of immunity by the Republic with respect to such actions, it would not be possible to obtain
a judgment in such an action brought in a U.S. court against the Republic unless such court were to determine that the
iii

Republic is not entitled under the U.S. Foreign Sovereign Immunities Act of 1976 to sovereign immunity with respect
to such action. Further, even if a U.S. judgment could be obtained in any such action under the U.S. Foreign Sovereign
Immunities Act of 1976, it may not be possible to enforce in the Republic a judgment based on such a U.S. judgment.
Execution upon property of the Republic located in the United States to enforce a U.S. judgment may not be possible
except under the limited circumstances specified in the U.S. Foreign Sovereign Immunities Act of 1976.
iv

DEFINED TERMS AND CONVENTIONS
Certain Defined Terms
All references in this offering memorandum to the "Republic" are to the issuer, and all references to the
"Government" or the "Central Government" are to the central government of the Dominican Republic and its
authorized representatives.
The terms set forth below have the following meanings for the purposes of this offering memorandum:
Gross domestic product, or "GDP", is a measure of the total value of final products and services produced in
a country in a specific year. Nominal GDP measures the total value of final production in current prices. Real GDP
measures the total value of final production in constant prices of a particular year, thus allowing historical GDP
comparisons that exclude the effects of inflation. In this offering memorandum, real GDP figures are based on
constant values referenced to their nominal level in 1991, the year used by the Banco Central de la República
Dominicana, the Dominican Central Bank or the "Central Bank", for purposes of maintaining real GDP statistics.
GDP growth rates and growth rates included in this offering memorandum for the various sectors of the Dominican
economy are based on real figures.
For balance of payments purposes, imports and exports are calculated based upon statistics reported to the
Republic's customs agency upon entry and departure of goods into the Dominican Republic on a free-on-board basis,
or "FOB basis", at a given point of departure.
The inflation rate provides an aggregate measure of the rate of change in the prices of goods and services in
the economy. The Republic measures the inflation rate by the percentage change between two periods in the consumer
price index, or "CPI", unless otherwise specified. The CPI is based on a basket of goods and services identified by the
Central Bank that reflects the pattern of consumption of Dominican households. The price for each good and service
that makes up the basket is weighted according to its relative importance in order to calculate the CPI. The annual
percentage change in the CPI is calculated by comparing the index as of a specific December against the index for the
immediately preceding December. The annual average percentage change in the CPI is calculated by comparing the
average index for a twelve-month period against the average index for the immediately preceding twelve-month
period. The Republic does not compile statistics to calculate a producer price index or a wholesale price index, which
are other indices often used to measure inflation.
Currency of Presentation and Exchange Rate
Unless we specify otherwise, references to "U.S. dollars," "dollars" and "US$" are to United States dollars,
and references to "pesos" and "DOP" are to Dominican pesos. Unless otherwise indicated, we have converted pesos
into dollars and dollars or any other currency into pesos for each year at the weighted average exchange rate for such
year, as used by the International Monetary Fund or the "IMF", in calculating the Republic's GDP in U.S. dollars,
using information published in the Central Bank Monthly Bulletin. This weighted average exchange rate is based on
both the Central Bank and private-market foreign exchange rates. We have done all currency conversions, including
conversions of pesos to U.S. dollars, for the convenience of the reader only and you should not construe these
conversions as a representation that the amounts in question have been, could have been or could be converted into any
particular denomination, at any particular rate or at all.
At the close of business on December 31, 2009, the DOP/U.S. dollar exchange rate for the sale of dollars, as
reported by the Central Bank, was DOP36.06 per US$1.00 and DOP 36.34 for US$1.00 on March 31, 2010. The
Central Bank exchange rate is used for transactions involving the Central Bank and the Government, particularly in
connection with external debt payments and disbursements of external loans. See "The Monetary System--Foreign
Exchange and International Reserves--Foreign Exchange."
v

Presentation of Financial and Economic Information
The Republic has presented all annual information in this offering memorandum based upon January 1 to
December 31 periods, unless otherwise indicated. Totals in some tables in this offering memorandum may differ from
the sum of the individual items in those tables due to rounding.
The Central Bank conducts a review process of the Republic's official financial and economic statistics.
Accordingly, certain financial and economic information presented in this offering memorandum may be
subsequently adjusted or revised. The Government believes that this review process is substantially similar to the
practices of industrialized nations. The Government does not expect revisions of the data contained in this offering
memorandum to be material, although we cannot assure you that material changes will not be made.
FORWARD-LOOKING STATEMENTS
This offering memorandum contains forward-looking statements. Forward-looking statements are statements
that are not historical facts, and include statements about the Republic's beliefs and expectations. These statements are
based on current plans, estimates and projections, and, accordingly, you should not place undue reliance on them.
Forward-looking statements speak only as of the date they are made. The Republic undertakes no obligation to update
any of these statements in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. The Republic cannot assure you that
actual events or results will not differ materially from any forward-looking statements contained in this offering
memorandum. In particular, a number of important factors could cause actual results to differ materially from the
Republic's expectations. Such factors include, but are not limited to:
· adverse external factors, such as:
o changes in the international prices of commodities and/or international interest rates, which could
increase the Republic's current account deficit and budgetary expenditures;
o changes in import tariffs and exchange rates, recession or low economic growth affecting the
Republic's trading partners, all of which could lower the growth or the level of exports of the
Dominican Republic, reduce the growth or the level of income from tourism of the Dominican
Republic, reduce the growth rate or induce a contraction of the Dominican economy and, indirectly,
reduce tax revenues and other public sector revenues, adversely affecting the Republic's fiscal
accounts;
o increased costs of crude oil resulting from increased international demand or from political or social
instability or armed conflict in oil-producing states, such as Venezuela and countries in the Middle
East;
o international financial uncertainty that reduces the Republic's ability to obtain loans to finance
planned infrastructure projects; and
o a decline in foreign direct investment, which could adversely affect the Republic's balance of
payments, the stability of the exchange rate and the level of the Central Bank's international
reserves, and a decrease in remittances from Dominicans residing and working abroad.
· adverse domestic factors, such as lower than expected fiscal revenues, which could induce higher
domestic interest rates and an appreciation of the real exchange rate. These factors could lead to lower
economic growth, a decline in exports and income from tourism and a decrease in the Central Bank's
international reserves; and
· other adverse factors, such as climatic, geological or political events.
vi

SUMMARY
This summary highlights information contained elsewhere in this offering memorandum. It is not complete
and may not contain all of the information you should consider before purchasing the bonds. You should carefully read
the entire offering memorandum, including "Risk factors" before purchasing the bonds.
Selected Economic Information
(in millions of US$, except as otherwise indicated)

As of, and for the year ended, December 31,

2005
2006
2007
2008
2009(1)
Domestic economy

GDP (at current prices)..........................................................
33,775
35,897
41,228
45,718
46,712
GDP (in millions of DOP, at current prices).........................
1,020,002
1,189,802
1,364,210
1,576,163
1,678,763
Real GDP (in millions of DOP, in constant 1991 pesos)......
262,051
290,015
314,593
331,127
342,564
Real GDP growth rate(2) ........................................................ 9.3% 10.7%
8.5%
5.3% 3.5%
Consumer price index (annual rate of change)......................
7.4%
5.0%
8.9%
4.5%
5.8%
Unemployment rate(3) ............................................................ 17.9% 16.2%
15.6%
14.1% 14.9%
Open unemployment rate(4) ................................................... 5.6% 4.9%
4.5%
4.2% 4.8%
Exchange rate (weighted end of period, in DOP) ................
33.15
33.08
33.52
35.24
36.10

Balance of payments(5)

Total current account(5).......................................................... (473.0) (1,287.6) (2,167.2) (4,528.8) (2,326.8)
Of which:

Trade balance ..............................................................
(3,724.7)
(5,563.7)
(6,436.8)
(9,245.4)
(6,820.4)
Income from tourism...................................................
3,518.3
3,916.8
4,064.2
4,165.9
4,064.9
Workers' remittances .................................................. 2,429.8
2,737.8 3,045.7 3,221.5 3,041.5

Total capital and financial account(5)..................................... 1,635.9
1,541.4
2,224.8
4,454.6
2,680.9
Of which:

Foreign direct investment............................................
1,122.7
1,084.6
1,562.9
2,970.8
2,158.1
Errors and omissions(6) .......................................................... (458.0)
(59.6)
569.0
(251.6)
55.4
Overall balance of payments, excluding impact of gold
valuation adjustment(7) .....................................................
704.9
194.2
626.5
(325.8)
409.5
Change in Central Bank gross international reserves (period
end) ................................................................................... 1,104.5
321.6
695.3
(284.1)
645.0
Central Bank net international reserves (period end) ...........
1,519.8
1,787.8
2,394.9
2,165.4
2,851.9

Public sector balance

Central government revenue(8)............................................... 5,255.6
5,823.6
7,256.1 7,235.8 6,399.7
As a % of GDP .................................................................
15.6%
16.2%
17.6%
15.8%
13.7%
Central government expenditure(9) ........................................ 5,542.0
6,258.6
7,173.7
8,689.3
8,017.7
As a % of GDP .................................................................
16.4%
17.4%
17.4%
19.0%
17.2%
Central government balance ..................................................
(286.4)
(435.3)
41.2
(1,455.5)
(1,618.0)
As a % of GDP .................................................................
(0.8)%
(1.2)%
0.1%
(3.2)%
(3.5)%
Overall non-financial public sector balance(10) .....................
(176.0)
(325.2)
41.2
(1,503.9)
(1443.7)
As a % of GDP .................................................................
(0.5)%
(0.9)%
0.1%
(3.3)%
(3.1)%

Public sector debt(11)

Public sector external debt(12) ................................................
6,775.5
7,237.5
7,544.9
8,130.9
9,033.8
As a % of GDP(2) .............................................................. 20.1% 20.2%
18.3%
17.8%
19.3%
Public sector domestic debt(13)...............................................
4,806.2
5,735.8
6,105.7
7,162.7
8,061.7
As a % of GDP .................................................................
14.2%
16.0%
14.8%
15.7%
17.3%
Total public sector debt .........................................................
11,581.7
12,973.3
13,650.6
15,293.6
17,095.4
As a % of GDP .................................................................
34.3%
36.1%
33.1%
33.5%
36.6%

Public sector external debt service:

Amortizations ................................................................... 538.0
1,016.8

981.2
1,039.3
1,373.0
Interest payments..............................................................
290.4
395.3
427.6
371.8
326.4
Total external debt service ..........................................
828.4
1,412.1
1,408.7
1,411.0
1,699.4
As a % of exports of goods and services..........................
13.5%
21.4%
19.7%
20.9%
31.1%
____________
(1) Preliminary
data.
(2)
Percentage change from previous year.
(3)
Refers to population at or above the legal working age that is not employed and is willing to work (even if not actively seeking work), as a percentage of the total labor
force.
(4)
Refers to population at or above the legal working age that is not employed and is actively seeking work, as a percentage of the total labor force.
(5)
Revised data for 2005-2008 and preliminary data for 2009.
(footnotes continued on next page)

1

(6)
Represents errors and omissions in compiling balance of payment accounts based on double-entry accounting resulting from incomplete or overlapping coverage,
different prices and incomplete times of recording and conversion practices.
(7) As presented in the above table, gold reserves have been valued at their corresponding market prices as of December 31 of each year.
(8) Includes total revenue and foreign cash or in-kind transfers to support public sector expenditures.
(9) Includes
unidentified
expenditures that consist of non-cash items, such as food, clothing and other items received by the Government as aid. Also includes
expenditures made in periods different from the current period and that were not currently registered.
(10) The non-financial public sector includes the Central Government and non-financial public sector institutions (such as state-owned enterprises and other decentralized
government-owned institutions).
(11) Consolidated public sector debt. Excludes debt owed by Banco de Reservas to foreign creditors.
(12) External debt is defined as all public sector debt issued in foreign countries and under the jurisdiction of a foreign court, independent of the holder's nationality.
(13) Net of Central Government liabilities hold by the Central Bank.
Sources: Central Bank, Ministry of Finance and IMF

2

Recent Developments
2009 Macroeconomic Outlook
During 2009 the Republic's real GDP growth was 3.5%; the international economic crisis slowed the
Republic's growth trajectory, which averaged 5.8% for the 2003-2008 period. Inflation was kept within the Central
Bank`s 6.0%-7.0% target range, reaching 5.8%, as a result of the combined effects of the reversal of the high food and
oil prices of 2008 and the contraction in domestic demand. Fiscal deficits have been cut in half, from roughly 9.0% of
GDP in 2003 to about 4.5% in 2009, while the public debt-to-GDP ratio reached 36.6%.

Following a period of high economic growth, averaging 8.5% per year for the period 2005-2008, GDP
growth slowed to 3.5% in 2009 compared to 2008. Notwithstanding these results, the Dominican Republic managed to
achieve positive growth throughout the international economic crisis and even outperformed other emerging and
developing economies that averaged a 1.7% GDP growth rate. In addition, world prices were also affected as global
inflation plummeted to 3.5%. The disinflationary pressures were systemic and risks of a deeper and extended
downturn surfaced when advanced economies registered deflation. Prices for goods and services in the Dominican
Republic and the peso/dollar exchange rate remained stable throughout the year, as the peso depreciated by
approximately 2% against the dollar.

The resilience of the Dominican economy is primarily a result of the coordinated and timely response from
both the Central Bank and the Ministry of Finance, each of which implemented counter-cyclical monetary and fiscal
policy measures to counter the effects of the global crisis.

Stand-by Arrangement with the IMF

In November 2009, the Republic entered into a US$1.7 billion multiyear stand-by arrangement with the IMF
(the "Stand-by Arrangement"), which made it possible for the Dominican authorities to implement a fiscal stimulus
response to the global economic crisis. The Stand-by Arrangement is intended to enable the authorities to implement a
macroeconomic program and a well-balanced structural reform agenda to face the adverse external environment. The
Stand-by Arrangement contemplates, among other things, a number of measures to improve taxation on fuels,
including a shift in the management of excise tax collection for fuels to the Dirección General de Impuestos Internos
(the Internal Revenue Agency), or DGII, greater transparency in the calculation of fuel parity price used to determine
the final market price, and the rationalization of fuel exemptions, as well as a general review of all tax legislation and
the strengthening of tax and customs administration.

In addition, in September 2009 the Central Bank received an allocation of special drawing rights (SDRs)
from the IMF equivalent to US$275.3 million, increasing the Central Bank's reserves to US$2,700 million and its
liquid reserves to over US$1,500 million. In April 2010, the IMF approved the first review of the program and
announced it would disburse an additional US$119.9 million.

Recent Measures in the Electricity Sector
The Republic has recently made significant progress in reforming the electricity sector, which has
historically suffered from a severe lack of generation capacity and poorly maintained transmission and distribution
networks. In 2007, the Dominican Congress passed the Law of Incentives for Renewable Energy, which has
stimulated the development of several new fuel and power generation projects, including an expansion of the
Republic's hydroelectric generation capacity and new wind energy generation projects. The Corporación Dominicana
de Empresas Eléctricas Estatales (the Dominican Corporation of Electricity Transmission), or CDEEE, is currently
working on completing a new project in the second half of 2010 that is expected to eliminate the transmission system's
current inability to carry electricity between the southern and the northern regions of the country to meet demand.
In 2009, the Republic entered into loan agreements with the World Bank and the IDB for an aggregate
amount of US$82.0 million to finance the Electricity Distribution Network Rehabilitation Project, which aims to
3

Obbligazione República Dominicana 7.5% ( USP3579EAH01 ) in USD

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