devaluating peso

if Hippo wins there is no telling.

I think the question is impossible to answer. Nobody knows, quite often we're reminded about the devaluation of the early 2000's whilst Hipolito Mejia was in power and the peso hit 55/1 vs USD, and, over the past 4 years there has been a slide 12.5% +-....
I think in order to put things into perspective we have to ask ourselves what effect a 'real' devaluation will have on a 'typical' Dominican family.
A devaluation will mean real prices rise, salaries will not be worth as much, will the Government allow their own people to starve? Gas prices will also rise meaning price hikes in transportation costs which also means people can't afford to travel to work. People may argue that devaluation may be appealing from a tourism point of view and of course those holding Dollars will also benefit should devaluation take place.
I believe should, (and let’s be clear, it’s a very loose ‘should’) Hipolito be voted in again, markets would panic and a devaluation would occur. To what degree, nobody knows.

Hippo was through bad times but we should not forget that he had 2 great years of economy. There was money in the streets "dinero en la calle", now only "comesolos" (PLD) have it. I have to tell you that I see many business owners rooting for "Papa" because of the hopes that money will return to the streets.

Businesses are on a brink of collapse in Higuey, there is lots of money concentrated but in few hands, tourism is great, but imagine this: we are in high tourism season, meaning hotels producing lots of $$$ and employees getting bonuses, but there is virtually no money moving in the streets. I have many local clients and I hear the complaints all over, everywhere. Even many PLD supporter (business owners) are fed up with the current administration.

Would Danilo be continuation of the same, or will it be new course? Hippo has apparently interest in making change, so as not to be labeled the politician who brought the DR to the brink of collapse in 2002. However, we all know that it was not Hippo's economic policy that brought hyperinflation, it was the bank collapse. How they HANDLED it, however, may bring some fault on his administration, but he did not ask Baninter and others to go belly up... Anyway, for me Guillermo Moreno and his Alianza Pais would be the best suited option for this country, but his time has not come yet....

berrrh I hate when countries have 2 prevailing parties changing power between them, like the US, UK and the DR (or one party like Mexico and most recently DR, where only 1 party is strong enough to stay in power). Much better in Europe where you have countries where several parties compete and many are close tie-ups, and physical coalitions have to be made to govern with different parties and views being represented across the governments.

Hi:

If the current administration wins this will possibly bring continued stability to the valuation of the peso in the DR. On the other hand if this does not happen then all bets are off and the peso could take a hit.

LTS

"Rep Dom",if anyone could accurately answer your questions,we would not be reading posts on DR1!
We would be in Monaco,sipping champaign!
Until my "flight leaves",I think I'll just leep my "small FORTUNE" in US Dollars!
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCcc
Sorry,"LT",the peso "Takes-A-Hit" no matter who wins.
Sadly,or better said,"Inevitably",after the elections,it will be time for the DR,to "Pay-The-Pipers"!!!!
Too Many "PIPERS"!
They will raise taxes,"across the board"!
Electric rates will increase dramatically.
"Comodities" will increase in price.
"Unrest" will also add to the devaluation.
Should be a great year ahead,for those with US dollars! :laugh::laugh::laugh:
CC
"Leonels New Philosophy for AFTER the elections,
"Let Them Eat "Biscocho"!

I agree that it will probably go up no matter who wins. Watching the rate on XE and it keeps fighting to break 39 and it keeps getting held in place - after the election they are not going to be spending as much money to keep the rate locked in - so it will go up. How high? Well, that's anyone's guess. But I think it will at least break 40 shortly after the election.

From the Dominican perspective, I agree with CC and J&T. However, I doubt the pricing will really change much for the tourist. When I was there a decade ago, the cost for everything was more or less the same as now, adjusting for inflation pegged to the U.S. economy. The stores/people I dealt with just adjusted their prices accordingly. For example, a villa I rented in 2002 was $100USD or 5500 pesos a night (at 55 to 1). Today, it goes for $140USD, or - you guessed it - 5500 pesos a night (at 38-ish to 1).

Hello folks,


Does anybody know if the DR central bank publishes their 'assets' anywhere? how much USD reserve does the CB have?
Anybody know?

DRob said:

From the Dominican perspective, I agree with CC and J&T. However, I doubt the pricing will really change much for the tourist. When I was there a decade ago, the cost for everything was more or less the same as now, adjusting for inflation pegged to the U.S. economy. The stores/people I dealt with just adjusted their prices accordingly. For example, a villa I rented in 2002 was $100USD or 5500 pesos a night (at 55 to 1). Today, it goes for $140USD, or - you guessed it - 5500 pesos a night (at 38-ish to 1).

Click to expand...

A lot of truth there.

My rent (in RD$) just went up, but I'm effectively paying less (in US$) now than 3 years ago.

Randall Bell said:

Hello folks,


Does anybody know if the DR central bank publishes their 'assets' anywhere? how much USD reserve does the CB have?
Anybody know?

Click to expand...

Banco Central de la Repblica Dominicana


Respectfully,
Playacaribe2

The peso is going to go nuts as it gets nearer the election. Keep your money in your other currency if you can because when the conversion changes it will change dramatically and quickly. I believe Hipolito will win for various reasons so hang on for the ride!

rubio_higuey said:

I hate when countries have 2 prevailing parties changing power between them, like the US, UK and the DR (or one party like Mexico and most recently DR, where only 1 party is strong enough to stay in power). Much better in Europe where you have countries where several parties compete and many are close tie-ups, and physical coalitions have to be made to govern with different parties and views being represented across the governments.

Click to expand...

While I broadly agree with your views, your knowledge of countries other than the DR is a bit shaky. The PRI (one party state) dominance in Mexico ended at least 14 years ago and the UK is presently governed by a coalition of two parties, a situation many commentators expect to continue after the next election. And while the US has only two significant parties which alternate in power, each of these parties may be considered coalitions of widely divergent interests and policies.