Will The US Dollar Hit 100 Pesos?

[CaribeDigital]

I am following the fiscal data offered by Banreservas and have not observed anything unusual until today. The DR inflates the peso steadily at about 3%-4% per year, so the 100 peso mark should be reached in a about 10 years.

Now, with the economy in the biggest crisis in the country's history the may be voices to devaluate the peso much faster. Local exports would pick up and real estate would be cheaper for foreign speculation. Smart? Not really.

This is because we don't know what will happen to USD in the not too distant future. There is a danger the USD will tank even faster then DOP. The USD years are counted.

I guess the DR government is smart enough to seek USD credit to cover the vital imports rather then throwing heaps of pesos for the dollar, which is simply not there at the moment. If they are lucky, they will be paying the debt back with the inflated dollars.

For anyone interested I would recommend reading the monthly balance sheets published of Banreservas page.

 

[playacaribe2]

DR debt has run amok since they came out of the IMF's bailouts that ended in 2012/2013.

Since that time, debt has ballooned to more than 40% of GDP...........40% is considered a danger zone for Emerging Market economies. Now factor in that this years budget is now busted due to coronavirus and expectations are for 0% growth in 2020...............so it would appear 100:1 is much less than 10 years away.

They have already this month requested funds from the IMF............and those wonderful bonds (debt) they sold over the last few years are going to impact those holding them in a negative way

Challenging times for the DR are ahead..........and please do not buy peso CD's unless you want to send your money to die......difficult times, triggered by the coronavirus pandemic......lie ahead.


Respectfully,
Playacaribe2

 

[cavok]

A year ago in April, the DOP was 50.45 to the USD. Now it's 54.8 which is an annual inflation rate of 8.5%. I don't expect it to drop back to 3%-4% anytime soon. 10 years sounds about right to hit 100. At 3%-4% it would take around 20 years to double.

The USD is the reserve currency of the DR and still is the cleanest shirt in a bag of dirty laundry. Central banks around the world have been printing money just as fast as the US. The DOP will continue to devalue against the USD.

 

[CaribeDigital]

You are right warning against CD. Any CD. Gold bullion is the way to go mid- to log term.

 

[cobraboy]

DR debt has run amok since they came out of the IMF's bailouts that ended in 2012/2013.

Since that time, debt has ballooned to more than 40% of GDP...........40% is considered a danger zone for Emerging Market economies. Now factor in that this years budget is now busted due to coronavirus and expectations are for 0% growth in 2020...............so it would appear 100:1 is much less than 10 years away.

They have already this month requested funds from the IMF............and those wonderful bonds (debt) they sold over the last few years are going to impact those holding them in a negative way

Challenging times for the DR are ahead..........and please do not buy peso CD's unless you want to send your money to die......difficult times, triggered by the coronavirus pandemic......lie ahead.


Respectfully,
Playacaribe2

And keep in mind than any cheese from the IMF comes with social strings attached.

 

[playacaribe2]

And keep in mind than any cheese from the IMF comes with social strings attached.

Each time the IMF has rescued the DR.............taxes have not only gone up..........they have found new things to tax.........courtesy of some of the "suggestions" of the IMF in return for a bailout.

Expect the same this time around too.

They will survive this and plod along as usual................but they will not thrive for some time to come...........the hit to tourism will just be too great.

Respectfully,
Playacaribe2

 

[DR Solar]

ALL markets are being hit at about the same rate with just about every country printing. Banks are basically locked down cincerning international transactions to other countries and daily to domestic.

I had a buy at 55 for the DR peso and changed to 60 that i think is high.

Watch. Don't rush in. Don't panic. Pick your spots.

 

[Blueceo]

Gold has always been and will most likely always be the only way to protect your wealth.