Central Bank of the Dominican Republic Increases Overnight Rate

The Central Bank of the Dominican Republic, following its commitment to maintain
macroeconomic stability and control over inflation, in a monetary policy meeting held on
July 30, 2008, increased its overnight rate from 9.0% to 18% effective.

This decision is consistent with the targets set in the Central Bank’s Monetary Program
and aims to reduce inflationary pressure on internal prices, given the magnitude of the
external shock. Interest rate movements are conditioned to the performance of internal
and external inflation determinants, considering the lags in the monetary transmission
process.

In this regard, even when external volatility has shown signs of moderation recently, their
effect on the Balance of Payments has been significant and the monetary authorities
foresee a lagged effect on the Dominican economy. Moreover, there is a persistent
imported inflation component originated by high international food, commodities, and
other finished goods prices.

Domestically, inflation risks are still present due to an increase in aggregate demand,
driven by rising consumption and investment public and private, which could affect
inflation in the last two quarters of the year.

The Central Bank will continue to closely monitor the international situation and the
developments in internal markets, as well as their implications for mid and long-term
inflation expectations.