The lift in the exchange rate

mountainannie

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Dec 11, 2003
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I just saw the exchange rate is now about 43 and wanted to reflect a bit on what a change it has made in my life. I know that prices have gone up but not as much as the exchange rate, it does not seem to me, anyway.

When I first planned to come here, about 13 years ago the exchange rate was 50 to one, I was solidly going to be fine. Then by the time I got here, it plunged to 25 to a dollar (who knows why?) where I was really sorta freaked about it, wondering? Then it creaped back up to 35 where it stayed for years and years.

Now it is going back to where i first planned. I know it is harder for locals but for expats, it is good.

I just wanted to warn you folks who are planning on coming here that you should plan for this sort of fluctuation. Sure, maybe you can make it at 43, but could you make it at 35? at 25? these things happen.
 

waytogo

Moderator - North Coast Forum
Apr 3, 2009
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No matter what the fluctuation.......
The store prices never go back down..........

B in Santiago
 

donP

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Dec 14, 2008
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Siempre un chin m?s

... prices have gone up but not as much as the exchange rate...

The prices of all imported goods reflect the exchange rate (and always a little bit more ;) ).
Even local produce is mostly calculated on dollars.
T? sabes: gasolina, repuestos, gomas.... :glasses:

I find, the price hikes are more than the exchange rate would justify.

But maybe I just buy the wrong items. ;)


donP
 

malko

Campesino !! :)
Jan 12, 2013
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Considering my MIL made dinner for 10,or so, with 2 1/2 pesos in the 80's, life has changed alot in the dr......

About xchange rates. A send myself swissfrancs over in pesos by Ria, delivered to my house for 5 swiss francs fixed cost.
Before 1400 hours rate is around 44, after 1400 it goes up to 47 or more ....... any ideas on why??
That would be GMT +1.
 

pauleast

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Jan 29, 2012
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The FOREX market allows investors to make a handsome living no matter witch way the exchange rate swings.
 

Tamborista

hasta la tambora
Apr 4, 2005
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The FOREX market allows investors to make a handsome living no matter witch way the exchange rate swings.

You neglected to realize the DOP/USD does not trade on any market, and you are either LONG or FLAT, no way to be SHORT this pair, even synthetically. Future receivables paid in RD Pesos maybe, but that is not considered a "position".
 
Jan 9, 2004
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I just saw the exchange rate is now about 43 and wanted to reflect a bit on what a change it has made in my life. I know that prices have gone up but not as much as the exchange rate, it does not seem to me, anyway.

When I first planned to come here, about 13 years ago the exchange rate was 50 to one, I was solidly going to be fine. Then by the time I got here, it plunged to 25 to a dollar (who knows why?) where I was really sorta freaked about it, wondering? Then it creaped back up to 35 where it stayed for years and years.

Now it is going back to where i first planned. I know it is harder for locals but for expats, it is good.

I just wanted to warn you folks who are planning on coming here that you should plan for this sort of fluctuation. Sure, maybe you can make it at 43, but could you make it at 35? at 25? these things happen.

As has already been pointed out, the peso is not tradeable....either alone or as a currency pair.....and I am not sure most people are capable if they could trade.

That having been said, the only way to even remotely protect your funds would be to keep half in dollars and half in pesos. That would provide a slight hedge against major moves either way. But that is probably not practical, nor wise, since the peso only massively strengthened once in recent history, after the IMF injected capital into the DR banco central to help prevent the the DR banks from toppling....and with it the economy. And even then, you would have warning.

By that I mean, when the armed guards are enforcing the government ordered exchange rate and its changing twice a day, the news is all about the health of a bank or banks (Banninter), dollars are scarce/unavailable except for small amounts at the banks, you have to order dollars several days in advance........and you have nerves of steel or inside knowledge..............then and only then should you exchange dollars, euros, pounds, etc., for pesos.....and hang on.

To my knowledge, one DR poster did......and I am sure, did quite well.

For the rest, the likelihood of the peso going down in value (up in the exchange rate) is a far more likely scenario.....and that is the one people should protect against...for now.

For those with short memories or no memory of the banking crisis that gripped the DR for years, I submit you do a little reading on the current economy in Venezuela that has created a three tier exchange rate, has 50%+ current inflation, and has companies pulling out because they cannot convert their bolivars to dollars (shortage)....witness the airlines curtailment of flights into/out of the country....or the shortages of toilet paper, cooking oil, food.....that must be imported and paid for in dollars/euros etc., that the government just does not have.

The plan therefore for most expats living in the DR with dollars, euros elsewhere, means basically keeping on hand/exchanging only the pesos you need for current needs.

Finally, understand DR banks are not insured, and any monies you have in dollars, euros, etc., should probably be kept in your home country and exchanged/sent on an as needed basis.

Respectfully,
Playacaribe2
 
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pauleast

*** I love DR1 ***
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You neglected to realize the DOP/USD does not trade on any market, and you are either LONG or FLAT, no way to be SHORT this pair, even synthetically. Future receivables paid in RD Pesos maybe, but that is not considered a "position".

When large items are bought and sold here, a commission is made on the exchange of the currency, large commissions and mostly by Americans or should I say exclusively by Americans who have the expertise to digest complex money exchanges.
 

Tamborista

hasta la tambora
Apr 4, 2005
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When large items are bought and sold here, a commission is made on the exchange of the currency, large commissions and mostly by Americans or should I say exclusively by Americans who have the expertise to digest complex money exchanges.

Still not a tradeable pair guy!
Yes, cambistas make a spread on purchase or sale of either currency, however there is no way to get SHORT the RD Peso, unless you are acting as a dealer, are you a dealer Paul, come on, you can tell Tio Tambo?
 

pauleast

*** I love DR1 ***
Jan 29, 2012
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Still not a tradeable pair guy!
Yes, cambistas make a spread on purchase or sale of either currency, however there is no way to get SHORT the RD Peso, unless you are acting as a dealer, are you a dealer Paul, come on, you can tell Tio Tambo?

..lol ...Ja Ja .. No dealer. Money gets my hands dirty. However items that are regularly imported and exported here are primarily bought and sold with 4 or 5 different currencies and the guy(s) that handle the transactions (money exchanges) get a commish, at least that's what some guy in a bar outside Santiago told me.
 

Criss Colon

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Jan 2, 2002
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"MA" that 56 to 1 was a fluke due to Hipolito's failed economy, and didn't reflect the value of the peso.
It was short lived.
I "BUY" for 8 people, have been for MANY years.
The increase in value of the US dollar, "vis a vi" the DR peso, has NOT been equal to the increased costs of EVERYTHING here in the DR!
It has helped a LOT, but not enough.
"C-mon" 50 to 1"!!!!!!!!!!!!!!!
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
 

tommeyers

On Vacation!
Jan 2, 2012
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I took a look at the DR CPI and found that it is not too much more than the 12 mo exchange rate change. I don't think I need to be concerned. Some of my US income is adjusted for US Cost of Living. Life is good.
 

mountainannie

Platinum
Dec 11, 2003
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I took a look at the DR CPI and found that it is not too much more than the 12 mo exchange rate change. I don't think I need to be concerned. Some of my US income is adjusted for US Cost of Living. Life is good.

Dominican Republic Consumer Price Index (CPI)

ok well now I feel worse.. did a really basic sorta algebra thing with the exchange at 25 in 2004 which it was and found the exchange should be at 50 now to make up for the prices. I have no idea if that is the proper way to figure it out, but it seems logical.

Guess I must be just managing my money better.
 

tommeyers

On Vacation!
Jan 2, 2012
1,599
0
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I live in Santiago
Dominican Republic Consumer Price Index (CPI)

ok well now I feel worse.. did a really basic sorta algebra thing with the exchange at 25 in 2004 which it was and found the exchange should be at 50 now to make up for the prices. I have no idea if that is the proper way to figure it out, but it seems logical.

Guess I must be just managing my money better.

The CPI went 60 to 120 (x2) in that same period. But current rates of cpi increases are lower. Good news!
 
Jan 9, 2004
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I took a look at the DR CPI and found that it is not too much more than the 12 mo exchange rate change. I don't think I need to be concerned. Some of my US income is adjusted for US Cost of Living. Life is good.

The DR calculates CPI the same way as the US does.....with food prices and gasoline stripped out of the equation. Put those into the mix and you get the "real" picture. Purchasing power is being eroded faster than you think.

Respectfully,
Playacaribe2