Peso devaluing vs. Dollar - Central Bank to Intravene?

windeguy

Platinum
Jul 10, 2004
42,089
5,914
113
I seem to remember a comment by a famous poster something like this:

Left to its own devices to float, the DR peso would be at 29 to the US dollar.
Well, they did build a METRO....
 

Tamborista

hasta la tambora
Apr 4, 2005
11,747
1,343
113
I seem to remember a comment by a famous poster something like this:

Left to its own devices to float, the DR peso would be at 29 to the US dollar.
Well, they did build a METRO....

It's a good thing the DR is on the gold standard, BWAAAAAAAAAAAAAAAAA!
 

Ringo

On Vacation!
Mar 6, 2003
2,823
41
0
Good for those with US DOLLAR INCOME, BAD FOR THE GENERAL POPULATION.

Absolutely. The price of everything went up. Restaurant menus blacked out the paso and put prices in US.

Peso dropped. Prices didn't and everyone is STILL living and paying those prices from that inflation.
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
Good for those with US DOLLAR INCOME, BAD FOR THE GENERAL POPULATION.

In the short term it is good for people with dollars, and bad for the general population. But it soon turns bad for people with dollars.

When there is instability, merchants, restaurant, etc., have to pay more for what they buy so they raise prices. But then fearing continued instability, they keep raising prices even after stability is restored. Then when they finally feel that stability is restored they stop raising prices, but if the rate of exchange goes down, they don't reduce prices.

Prices go up fast, they go down very slowly, if ever.

When I came to the DR in 1985-86, the rate of exchange was less than 2 to one. The rate was quite stable, and a dollar bought a lot more than it does today.

Tourists like to get a lot of pesos for their dollar. They would feel differently if they lived here.

If you were here in the last year of Hippo's term, you would know what I am talking about
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
It'll be 43.50 by Xmas.

It may be, but I hope not. It depends on the government. The peso is not floating.

Also, at Christmas time, more dollars come into the country as tourists begin arriving and paying higher rates because of high season. In many years, the rate drops for those reasons at Christmas time.

But it depends on what government and central bank decide.
 

delite

Bronze
Oct 17, 2006
2,022
0
0
I remember my first time here in October 2006, the exchange rate was $32 DP to $1 USD. The central bank needs to acquire some more dollars in its reserves.

It's almost daily reading about some multi-million dollar project being erected or sod turning somewhere in the country. This is adding to their debt significantly because most of the "obras" are financed by government and very few are joint ventures. Just my observation.
 

bronzeallspice

Live everyday like it's your last
Mar 26, 2012
11,009
2
38
Good for those with US DOLLAR INCOME, BAD FOR THE GENERAL POPULATION.

And the worse it's going to get as food prices increase so will the crime rate. You guys living there need to take safety precautions seriously. It's going to get worse as desperation will make some people do the unthinkable.
 
Last edited:

delite

Bronze
Oct 17, 2006
2,022
0
0
And the worse it's going to get as food prices increase so will the crime rate. You guys living there need to take safety precautions seriously. It's going to get worse as desperation will make some people do the unthinkable.


Oh certainly! The first thing noticeable is normally the price for food. I've noticed the price for fuel also ticked up 2 pesos. For a while, government tried to maintain propane gas below the threshold of $100 pesos. Now the housewives are going to be in the streets with their pots and pans because they've been hit with a double whammie.

The increase in fuel directly affects the cost of food and all other goods and services: it's almost immediate!