Article about Peso and Dollar in Dominican Today

judypdr

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Jul 23, 2011
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I don't understand what this means. Is the dollar stable or is the peso stable and does it matter?

Judy



From Dominican Today online newspaper

ECONOMY October 22, 2018 | 3:18 pm

Dominican peso ‘stable’ as dollar hovers at historic high

Santo Domingo.- The US dollar remains stable against the Dominican peso in the prices of Dominican Republic’s currency market, according to recent reports by the Central Bank.

On Monday however the American currency reached RD$49.94 pesos to sell, and RD$50.02 pesos to buy.

The $50.02 peso-per-dollar mark is the sharpest devaluation of the Dominican currency since 2003, amid the financial crisis that sent the national economy into a tailspin and the dollar at RD$57.00 to one.
 
Jan 9, 2004
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I don't understand what this means. Is the dollar stable or is the peso stable and does it matter?

Judy



From Dominican Today online newspaper

ECONOMY October 22, 2018 | 3:18 pm

Dominican peso ‘stable’ as dollar hovers at historic high

Santo Domingo.- The US dollar remains stable against the Dominican peso in the prices of Dominican Republic’s currency market, according to recent reports by the Central Bank.

On Monday however the American currency reached RD$49.94 pesos to sell, and RD$50.02 pesos to buy.

The $50.02 peso-per-dollar mark is the sharpest devaluation of the Dominican currency since 2003, amid the financial crisis that sent the national economy into a tailspin and the dollar at RD$57.00 to one.

Stable would be a relative term.

Has the peso moved up/down by 3 or 4 pesos against the dollar in one week or one day.....No.

Has it been devaluing at a faster pace over the last 6-12 months....yes.

Will it collapse in the near term.......No.

Will devaluation of the peso continue at a slightly quicker pace as has been seen in the last 6-12 months.......probably.

The wild cards are held by both the US and the DR.

If the DR raised borrowing rates last month in lockstep with the US............the peso would have likely held under 50 until the New Year. But they did not.....thus the peso weakened a little quicker against the dollar than most expected.

If the US raises its borrowing rates again in December as is currently anticipated and the DR does not........you may well see the peso lose more ground.

The DR has been on a bit of a borrowing binge and a lot of that borrowing needs to be re-paid in dollars, which now requires more pesos needed to convert to dollars, which then requires decisions on the part of the DR whether to further devalue the currency, increase their international reserves of dollars, raise interest rates, etc.

Lots of moving parts to consider...........but the overall direction is pretty clear.......the peso looks to continue to weaken against the dollar......for the foreseeable future. The only thing uncertain is the pace of the move.

Respectfully,
Playacaribe2
 

Tom0910

Well-known member
Sep 28, 2015
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Why is XE.com showing rate at 49.2 since yesterday?
XE is my go to site for exchange rates for COP,CAD and DOP but they have had the DOP wrong for weeks now. I sent them an email about it and they never responded.
 

cavok

Silver
Jun 16, 2014
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The official rate put out by the central bank here in the DR, Banco Central, is the correct one to use as per the link in post #6.
 

judypdr

Active member
Jul 23, 2011
558
1
38
73
Costambar
I don't understand what this means. Is the dollar stable or is the peso stable and does it matter?

Judy



From Dominican Today online newspaper

ECONOMY October 22, 2018 | 3:18 pm

Dominican peso ‘stable’ as dollar hovers at historic high

Santo Domingo.- The US dollar remains stable against the Dominican peso in the prices of Dominican Republic’s currency market, according to recent reports by the Central Bank.

On Monday however the American currency reached RD$49.94 pesos to sell, and RD$50.02 pesos to buy.

The $50.02 peso-per-dollar mark is the sharpest devaluation of the Dominican currency since 2003, amid the financial crisis that sent the national economy into a tailspin and the dollar at RD$57.00 to one.


mobrouser, how can you dislike a question...?
 

Fernandez

Bronze
Jan 4, 2002
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The Dominican Peso is a fabricated financial mechanism that sustains itself by occulting the incredible inefficiencies that exist in the domestic economy and allowing conditions that bring about the most basic of exchange arbitrage at the expense of an ever declining labor cost. It's the old "invoice in a tradable hard currency and pay in a weak one." Nobody wants it- offer dollars and get discounts. Best to keep basic operational expenses in pesos- the rest in viable, tradable, liquid currency outside the DR.

Next time the currency heavily devalues, and Central Bank rates return to 50% in pesos, some consideration of taking a short trading position in government t-bills might be a consideration.....again. Don't cry for me Argentina.
 

chico bill

Dogs Better than People
May 6, 2016
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More important is the rate of the Dominican Peso against the Chinese Yuan (where half the junk imports come from) or Korean Won (where all the Hyundais and Kias come from) or the Argentine Peso (where all the pharmaceuticals come from).

Yes some supermercado goods (got to have my Arm & Hammer toothpaste) and fuel will rise as the Dollar rises against the DOP but other costs won't.

I can forgo my Hersheys with almonds for a Mas Mas bar to save money.