W/ the elections coming in May, what are your thoughts of the direction of the $RD thereafter? I am thinking more devaluation with the billion in increased borrowings. What is your intermediate to long term outlook? It's amazing how the RD$5 million peso exemption on property taxes captured homes as high as $300,000USD 10 years ago. Today, around $139,000USD. That is a real devaluation. What would happen if the RD$ significantly strengthened against the USD? Home values would drop drastically in terms of the $RD, but not necessarily against the USD. Ok, I know-you can stop laughing about that last bit.
- Thread starter AndyGriffith
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What Is The Outlook For The $RD?..
Good Evening Andy,
I was thinking the same since coming back from DR, I've found this link and would like to hear members, of this virtual but so real members
, give their insight. I am far from being an economist, but would like to learn.
CIAO/EIU Partnership: Dominican Republic: Country outlook
I was thinking the same since coming back from DR, I've found this link and would like to hear members, of this virtual but so real members
, give their insight. I am far from being an economist, but would like to learn.CIAO/EIU Partnership: Dominican Republic: Country outlook
Outlook for RD Peso
The report above was done in early 2009 when economists were very pessimistic (remeber, Lehman had only toppled a few months before, economists were shaking in their boots far more so than most of us who didn't grasp the full implications of the news). Projections for GDP and the peso were very bad for 2009/2010 and now that we have the luxury of hindsight we can confirm that they were off.
A new report that I found was written in Feb. 2010 so it's, at least more recent, likely not any more correct with forecasts, as we've found that even the most respected economists (i.e. The Economist Intelligence Unit, as quoted above), are making "crystal ball" predictions (educated "crystal ball" predictions, mind you) but still guesses, when providing forecasts.
http://overons.rabobank.com/content/images/Dominican%20Republic-201002_tcm64-74960.pdf
The report above was done in early 2009 when economists were very pessimistic (remeber, Lehman had only toppled a few months before, economists were shaking in their boots far more so than most of us who didn't grasp the full implications of the news). Projections for GDP and the peso were very bad for 2009/2010 and now that we have the luxury of hindsight we can confirm that they were off.
A new report that I found was written in Feb. 2010 so it's, at least more recent, likely not any more correct with forecasts, as we've found that even the most respected economists (i.e. The Economist Intelligence Unit, as quoted above), are making "crystal ball" predictions (educated "crystal ball" predictions, mind you) but still guesses, when providing forecasts.
http://overons.rabobank.com/content/images/Dominican%20Republic-201002_tcm64-74960.pdf
Thanks DRinvestor785,
Isn't RABO Bank heavily investing into farming projects? I remember meeting with one of their executive while attending a world conference regarding agriculture.
Thank you for the feed back
Cordially,
Isn't RABO Bank heavily investing into farming projects? I remember meeting with one of their executive while attending a world conference regarding agriculture.
Thank you for the feed back
Cordially,
Dollar is in pretty good shape, better now that Venezuela finally agreed to buy 49% of the shares in Refidomsa. That means about US$200.00 MM that won't have to go out from the DR's economy due to oil debt, added to the fact that Valdez Albizu is still running the Central Bank.
I predict the Peso's value will be in pretty good shape at least until 2012.
I predict the Peso's value will be in pretty good shape at least until 2012.
Definitely looks like the peso will be devalued large after the elections. 40-45? The IMF wants that devaluation.
Peso Devaluation
To try and estimate with some factual data behind it would require running a regression on FX rates changes to election years, specifically those with changes in regimes, i mean government.
What I do believe though is that regardless of elections, with the amount of debt being taken on by the government, the peso will at some point devalue. I would say 40-45 would be a floor, but this range is not based on empirical data. The facts are irrefutable though, when a country loads up on debt in such a short amount of time, has high corruption, and limited natural resources with which to generate excess Revenue to pay down debt, the only place for the currency to go is down as the country strangles itself with higher taxes to try and pay down debt, while at the same time likely printing more money to cover bloated budgets. (i.e. inflation).
In simple terms, if the DR was personified, he/she would have poor credit, a crappy job being paid in deteriorating currency, no security, no savings, a huge mortgage, and personality disorder where he/she only does "good" at the tail end of 4 years and can't seem to learn from mistakes, that doing well for the people, does well for the country, and even does well for the corrupt crooks running it.
I would suggest holding a basket of currencies in order to hedge against peso devaluation. e.g. 33% US 33% EURO 33% Pesos if possible.
just my 2 cents.
To try and estimate with some factual data behind it would require running a regression on FX rates changes to election years, specifically those with changes in regimes, i mean government.
What I do believe though is that regardless of elections, with the amount of debt being taken on by the government, the peso will at some point devalue. I would say 40-45 would be a floor, but this range is not based on empirical data. The facts are irrefutable though, when a country loads up on debt in such a short amount of time, has high corruption, and limited natural resources with which to generate excess Revenue to pay down debt, the only place for the currency to go is down as the country strangles itself with higher taxes to try and pay down debt, while at the same time likely printing more money to cover bloated budgets. (i.e. inflation).
In simple terms, if the DR was personified, he/she would have poor credit, a crappy job being paid in deteriorating currency, no security, no savings, a huge mortgage, and personality disorder where he/she only does "good" at the tail end of 4 years and can't seem to learn from mistakes, that doing well for the people, does well for the country, and even does well for the corrupt crooks running it.
I would suggest holding a basket of currencies in order to hedge against peso devaluation. e.g. 33% US 33% EURO 33% Pesos if possible.
just my 2 cents.
The best protection, if at all possible, is to have in your hands only the poses needed to meet immediate needs
If you have income from sources outside of the DR, keep it on deposit in a bank in your own country and draw out what you need as you need it via ATM or personal check cashed by the banco de cambio that you have established a relationship with.
If you have income from sources outside of the DR, keep it on deposit in a bank in your own country and draw out what you need as you need it via ATM or personal check cashed by the banco de cambio that you have established a relationship with.
E
engineerfg
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As a note to other expats who are for example renting in DR, it appears many landlords try to quote their prices in USD and sign their agreements in USD.
Given the potential currencly flux (and regardless of it), push as I did to sign your deal in RD pesos. They will/should sign it!
Given the potential currencly flux (and regardless of it), push as I did to sign your deal in RD pesos. They will/should sign it!
I am still looking for $RD 40-45 by the end of this year. Any new thoughts about the direction of the peso in the next 6 months?
All speculations. I find it amusing how some people think they are experts on money issues. There are no signs of where the peso will go. The world has been a crazy place in the last 2 years and the USA shows no sign of recovery....so my guess is the peso will remain the same. But what do I know, I'm no expert.
It won't happen, the Central Bank won't let that happen, they have a really strong internal economy, Venezuela Oil Dollars are a really big help and push in the exchange rate. You won't have any problem at all until 2012.
Well if the CB in DR has a 'strong economy' and can ultimately control the direction of their currency, then they could also start pairing down their pending external debts and reliance on the same. This is simply not happening at the moment. Again, there are prognostications and then there is the reality of the situation.