Is the Peso going to go up or down? Any Insight?

[JAMIE]

!!!!! patient is the virture !!!!!!!

******* 1:34 **************

When did you get 1:34? and where? pls adv.


The patient is the virture has explained a lot of things for Pesos up and down. The CB has enough patient to wait for the US $ come in and push the US $ down.

Now, you should have enough patient to wait for the US $ up and exchange them in Pesos, unless you need Pesos urgently.

Hedging both US $ and Pesos, buy low and sell hign (at your best judgement and discretion) . May be you should have certain balances in both currencies at diferent banks with good liquidity to move in and out.

Or, you can consider the "dollar cost averaging" to lower your risk.

 

[XanaduRanch]

This morning cashed a few stray checks clients had sent here by mistake in Sosua. The rate was 25:1. I was told that was up from around 21:1 yesterday. I was shocked! If they weren's so small I'd have just tucked them away for next week.

It'll be back around 30:1 or more in a week or two I am sure.

 

[NYC_Girl]

Hope you're right XR!!!

I think he's going to take a break, come home for a few weeks and then return when it stabilizes.

I can't believe how fast it's dropping. Looking at old posts there were predictions of 40:1.

Oh well...

 

[Criss Colon]

And,It WILL be at 40 to 1!!!!!!!!

I "see" floating around between 25 and 30 to 1 for the next 6 months.But wait until next year! When Hipolito is re-elected,I hope it only get to 40 to 1!Might be cheaper to wipe your ass will 10 peso notes,than to buy toilet paper!
cc

 

[Peter & Alex]

Ken,
Simply reporting the street values in the mid mornings for interest. You can of course get more but we just thought to keep folk amused with what happens in Cabarete & Sosua.
Today mid morning 03.09.03 - Sosua streets RD$25 and in Cabarete streets it was as low as RD$23!
Interesting to see what values you can still get at banks etc.

 

[Conchman]

I see the rate stabilizing between 26-30. There will be fluctuations up and down when big dollars come in (e.g.IMF) and subsequently speculators make runs at it, but it will always bounce back to within this range.

 

[Lurch]

Why run to the cambios now?

The government gets a another new loan (which is basically what allowed the DR economy be placed on the INEVITABLE road to collapse) and begins to move certain ?reserved? liquid assets into the currency markets and thus increasing the amount of dollars in circulation.

The Central Bank (which the government now completely controls) issues billions of pesos in certificates at rates that would make your average loan shark smile. Thus artificially reducing the amount of pesos in circulation and thus artificially increasing both the commercial lending rate (by forcing local banks to compete for deposits) and the pesos value. Translation, placing the DR economy into recession by anyone?s definition.

The government then continues its policy of strong arming the cambios into an even more artificial exchange rate through the threat of arrest or new taxes.

The government uses remaining new loaned monies not to invest in the country, however to pay off power debts, political elections and patronage. Translation, the entirety of the loaned monies are exhausted without any hope of tangible returns.

The government then slaps a 5% tax on exports thus crippling the any hope of the DR has of attempting to be competitive in the world market and recovering the exited hard capital. Lets also be very honest here in that the DR can ill afford this additional tax because it is not competitive economically other than low cost tourism (mostly, AI?s), minor agriculture (lack of export capacity/mentality) and low cost labor (which does not offset the higher cost involved in manufacturing and transportation of product, when compared to other sourcing locations).

A reasonable person would conclude that the artificially inflated exchange rate cannot be maintained for an extended period of time and when the support monies (loans) are waning or exhausted the peso/economy will utterly collapse, examples Argentina, Thailand etc. etc et al.

This scenario does not even factor in the major problem of the ?grace period? of the original loans (the ones that caused the problem in the first place) are quickly approaching of time of expiration. Ergo the exit of hard capital can be expected to increase geometrically or the government perhaps may find a white knight to refinance at garbage heap junk rates in USD or Euros.

Please have a Presidente, MG or Cuba Libre and relax in the sun and avoid any ventures or major purchases at this time.

 

[GringoCArlos]

If the tasa DOES stick around the mid-20's for another 5 months, GOLO is going to make out like a bandit on those 6 month certificates from Banco Central, and he will end up with a net return of somewhere around 57% + in only 6 months.

Ex: In August, change US$100k into RD$3.5 million in certificates, receive RD$100k per month for 6 months, cash out the certificates at RD$3.5 million, and with the RD$4.1 million, buy USD back at 26 to 1 = US$157,692.

Not Bad! IF the tasa stays there.

(edited to correct my awful math)

 

[samiam]

Morning panic

OK, this is getting to be a bit too much. This morning I reported buying at 27.5X1 in StoDgo, from some of your comments I see it went below 25X1 in some places like Sosua.
Is it normal for the x-rate to be cheaper there?

Anyhoo, this morning I saw it drop to 26X1 here and by 4:00 all the dollars where gone and it had climbed back to 28-29x1 in some places. This freaking sucks!!!!!:angry:

I dont care if its at 20X1 or 50X1, just let it be steady!!!

Changing currency in the DR is almost like playing the market.

 

[andy a]

samiam

Exchanging any currency at any time is definitely like playing the market, since exchange rates fluctuate.

What is not clear is how it harms you. It gives you an added opportunity.

 

[samiam]

Andy

I know they fluctuate and I expect them to do so but such volatile fluctuations are a bizatch!!! Its not healthy.
I guess I am just complaing b/c lost some money on that transaction today. I was really getting my moneys worth at the 35X1 days. I guess you cant ride the wave forever.

 

[andy a]

samiam

Using your own figures, if the current rate is 28-29, and you exchanged some at 35 and some at 26, you are WWAAYYY ahead.

Count your blessings, and enjoy it while it lasts.

 

[sjh]

be sure to check the rate at which people are selling dollars at too, the spread between the numbers tells a lot. sometime they are selling pesos at 27 but are not willing to sell dollars at all.

I do see that the peso seems much much stronger in sosua than over in our area

 

[Texas Bill]

Is the Peso going up or down? Any insight?

I think what you people in the Sosua/Cabrete area are seeing is a severe hedging by the cambios in a captive market.

You're in the middle of the "tourist" area and the exchange facilities are taking advantage of that situation and doing a little "margin floating" to your disadvantage. The market(internationally, according to Ionada) is maintaining a US$/RD$ ratio of 32-33/1 and it's been that way for the past week.

Maybe you should get on the bus and go to Santiago to change out? I'm sure you'd get a better rate there.

Texas Bill

 

[Golo100]

Leave it alone

I think its time for everyone to stop worrying about the currency situation. People should use their energies with something else. Just leave it alone. I am not worrying about this crazy business anymore. It does not matter to me. Whichever way it goes its fine with me. If the dollar goes down to $20 to $1 I will do very well, but if it goes to $50 to $1, equally fine with me.

Even if you are not an investor you should stop worrying about this. It helps no one to continue with this diatribe about pesos vs dollars. Its a matter of taste right now.

I am looking at making a killing with real estate. This is going to get nice for apartment and house hunters with cash buys, not loans. Besides, with the PPH looking under every rock for money from people with money, its best to protect some of your liquidity from these vultures.

My confidence in this lousy Hippo government has not increased one inch even with the IMF and the World Bank stepping his toes. I am staying one step ahead of the Hippos tax butcher. Besides I have gotten lucky everytime. For instance, one of my cars did not pay the license plate sticker for two years, but the new plates will increase to $2500. Yet, the $2500 will forgive you any previous years missed. Score this one for me and **** Hippo. I love it even if it is a measly $2500. Everytime I can hurt that bald piece of shit I celebrate.

I will wait till January to make any purchases for real estate until he decides to obey the luxury tax elimination for constructions under $3,000,000, which was supposed to go into effect now. But he dictated a suspension until January. So I will wait and stick it up his ass. His PPH thieves are not going to buy jeepetas with my money.

By the way, those who had off-shore dollars with Bancredito, Mercantil and Baninter are screwed. Letters just went out to everyone converting their dollars to pesos at a low rate and placed in pesos certificates at 26% with longer fixes. There is nothing they can do. This is a "corralito" custom made for them. Ironically, Julio Cross, the bank superintendent stated in a TV talk show that we should all place our dollars in Banco Popular off shore branches because those are secured. Screw him! Thats the last place I would go. BP is a PPH political base. Does anyone know how much money BP is investing in Hippos reelection? It really bothers me. After heavy questioning because of his biased opinion, he also added Banco BHD, Bank of Nova Scotia and Citibank as safe havens. Watch out for anything the PPH people recommend.

With the shakyness of the banking system, even with IMF watch, commercial certificates begin to look attractive again. The IMF watch is as good as having a hen protecting my home. Look at Hippo spending all the dollars coming in in his populist, wasteful campaign. The whole thing is a joke. He just requested close to $1 billion to spend from congress. Congress will approve. We will get the tab.

TW

 

[dawnwil]

peso gain or US $ loss?

Everyone's talking about the peso rising, but the US $ has dropped about 3 cents against the Can $ (for one) in the last week or two, although a Can $ interest rate hike is partly responsible here.

Some beige book report seems to have weakened the US $ internationally.

I don't understand the relationship between these two currencies, and am wondering how the US $ performance elsewhere affects its relationship to the peso here.

thanks for thoughts! D

 

[andy a]

dawnwil

The relationship between the dollar and peso isn't affected by the dollar's international position.

The dollar has been STRONG lately, by the way, because its strength or weakness is defined primarily by how it fares against the other major (hard) currencies - Yen, Euro, and Swiss.

Neither does the relationship between the Canadian and US dollars affect the international situation.

 

[dawnwil]

LOL-- one thing I do know ...

is how little the Can $ figures in the grand scheme.

Thanks Andy.

I know little about currencies, but have had simple good luck this year... first began thinking about a move south last spring, and if that had happened I would have got 20% less for Can exchanged to US.

What about the British sterling? Is it now a has-been with the Euro in existence?

D

 

[Ken]

Re: LOL-- one thing I do know ...

What about the British sterling? Is it now a has-been with the Euro in existence?

Don't know its standing elsewhere, but still listed on the exchange boards at the bancos de cambio in Sosua. On a couple of the boards that I saw around noon today, the dollar and euro were 29, the Canadian dollar was 18, and steriling was 44.

 

[calamardoazul]

did anybody exchanged US$ today?

has anyone exchanged some us$ today?

What rate you got? Please I would like to follow this IMF drama closely:bandit: