Golo, how could you let Hipolito cook up this peso/dollar scheme???

what bs

Didn't the government already try to artificially control the peso slide a few months back? and didn't the IMF pull out of negotions for that? Won't this affect that again?

I am just pissed that I missed the 40+ to 1us!!!

So are the exchange houses selling dollars at the new 'hippo' prices?

I am sure all the fuel folks are "falling into line" too....

.....sure by next week that fuel prices will "drop" at a "peso" per day as well......(ha).

Also sure that all those items purchased in dollars "from the market" will also follow suit.....("double" ha).

A real "case study" in economics that will be a lot of fun to observe.

I went to Popular this morning to pay some bills and asked about the x-rate. It was 38.5X1 this morning. At BHD it was at 39X1 by 12N.
I also have information that at yesterday's meeting, the government threatened all exchange houses to turn in their financial statements by begining of next week or run the risk of being shut down. Hence the presence of the military at the meeting.
Thank God I squeezed that 41-42-43 and 44 x-rate for all I could!!!!!

Loaves and Fishes

How does Hippo expect people who won't accept a value of 30 for a peso worth 40, to sell US for this new 30:1 rate?

This can't last a week and just inspires black marketeering.

You cannot impose fixed rates on a free market commodity. Who's going to donate 25% of the value of their cash to this cause? Not me.

I'm sorry guys but none of you are considering the speculation that is going on with the dollar. The only reason why supply and demand are keeping the rate above 40 is because of speculation, not for economic reasons. The cambistas are holding all the money. Samiam is right, exchange houses were going to be shut down yesterday, specifically Vimenca. There are also political reasons behind all this. There are those keeping dollars away from the system in order to blame Hipo's economic policies, and he know's this. That's why for his own sake he has to crack down on speculators and for that reason I believe the rate will probably go down to 28 to later stabilize at 30-31, which should be the real economic price.
In addition, wire transfers will be inspected, as well as suitcases at the airport, now more than ever going after those like the guy who was caught with 700,000 in dollars and euros. If you are wiring a large amount of money you better be able to justify it by either showing that you are paying a dollar debt or you are purchasing raw materials or finished products to import. Otherwise, look out. And if Hipo has to close all the cambistas, and buy and sell dollars thru the central bank, believe me he will. Hipo is here to stay 4 more years, wether we like it or not.

> The only reason why supply and demand are keeping
> the rate above 40 is because of speculation, not
> for economic reasons.

What is your proof? So you think nothing is wrong with the country? The power, earthquakes, etc have no effect on productivity?

Markets fluctuate, its normal.

Hippo is trying to take advantage of the softening that will happen in the peso over this month.. but the real problem is that he doesn't seem to respect the markets, by his actions it would appear that he thinks he can control them, rather than the other way around.

If I were a USD investor and could choose between a country with floating rates, and a country that did this kind of stuff, I'd go to the open country.

My prediction is that this will work in the short term and then make things much worse in January. People with money to invest don't like this kind of thing, so it will only decrease demand for the peso over time.

This wouldnt be happening if we had a Prez whom the people respected. He's been saying he'll talk and talk and talk and now he's been forced to take harsh measures that are not bound to stabilize the x-rate in a long term effect. Its all a matter of confidence, and the people have been loosing confidence ever since this idiots started governing.

X-rates went up for all of us making money in dollars but the vast majority is sucking on a cable (I know you loose some in the translation). I sold some dolars to my neighboor, he went on vacatons with the wife and kids to Miami and Disney. I sold him US$4,000, that was RD$ 164,000 at 41X1. For people who make RD$30K p/Month, forget about vacationing abroad, go to Juan DOlio or Bavaro!!
And for those of us who have to put up with the sad joke of living here, who would have thought a presidente beer would cost $45.00 and a Corona $130.00?I say bring that motherf*@&er Hippo down!!!:angry:

adrianb said:

What is your proof? So you think nothing is wrong with the country? The power, earthquakes, etc have no effect on productivity?

Markets fluctuate, its normal.

Click to expand...

In Part I agree with Roca. There is a certain level of speculation fueled by the uncertain and sometimes comical economic policies of a president who doesnt know how to govern. And that last part no one can prove otherwise.

It is natural for markets to fluctuate, this I agree with you 100%but market fluctuations are generally not this volatile for this long. What has been going on the past four months has not been normal. At least in this city, some of the big casas de cambio stop selling dollars whenever they want in order to bring prices up and if you don't know someone connected, forget about buying.

It has been a combination of bad policy, greedy x-change houses wanting to make a buck and bad luck we have you know who and no one can save us now!!

Hippo can try and regulate the exchange rate in the streets, but what about on the international market?

Ridiculous

Order the peso to drop to 30 to 1?????

What does he think he is doing, ordering a pizza or a hamburger, it certainly will not be that easy, presidential decree or not. Doesnt the economy and other world factors have any part in the value of the peso.

I think I will order the Canadian dollar to become par with the US dollar and the euro, wonder what my banker will think, I likely would be committed to an asylum.

You Are a Mere Piker

Hlywud said:

Order the peso to drop to 30 to 1?????
....I think I will order the Canadian dollar to become par with the US dollar and the euro, wonder what my banker will think, I likely would be committed to an asylum.

Click to expand...

I have since decreed the CDN$ to be worth $1,000 US and am off to buy some Mercedes' in Buffalo for $50 CDN each. Want one?

Par, harumph.

Government talks about speculation, but I remember the Central Bank Governor saying this in November of last year when the Dollar started to rise mysteriously, remember? As it turned out, it was not speculation. There was a good reason for it. The Central Bank was printing pesos to prop up Baninter. And in a way, One could argue that the market was quite efficient at pricing this into the exchange. Now they are talking about speculation again, and I don't blame them. They can't say "our policies are incoherent and atrocious, not worthy of running a pulperia." I think the markets have priced the peso right on the mark. As was said before, money is a commodity. The price of the dollar is driven by its demand. To think you can control this by strong arm tactics and by clubbing people over the head is nothing more than voodoo economics. This latest action is not only laughable but will only reinforce the notion that this administration is an economic disaster on wheels.

There was an excellent article in the HOY newspaper, yesterday from an economist who analized the current situation. He projected that all things being equal the dollar will climb to around 75 to 1 by mid march, as the government repays a lot of obligations that are due starting in mid January. My advice to everyone is to buy every dollar they can if it goes down to 30/1. Even if Hippo does manage to maintain it at around that range until elections are over, there's not way it can be maintained over the long range. All you need to look at is the fact that about 49% of the budget will have to be used to repay debts, which are due in USD. Where will they get those USD's? How is this huge demand going to affect the supply? I wouldn't be surprised if they decide to confiscate all the dollars people have in banks and exchange them for useless pesos.

Explica me porque

It is interesting to see that 3rd world economics are repeated again. To actually establish an offical exchange rate apart from the internationally established one is suicide.

1) Arbitraging will occur. Any difference in pricing with real world pricing will be used to change pesos to dollars at the government rate. These dollars will then be exported somehow and sold for pesos at the real price outside the DR. Then go back to step one and repeat.

2) The only way to stop 1) from occuring is to ban export of pesos and to no longer accept pesos from abroad as a currency when they are returned to the DR. (So in effect all pesos outside DR lose their value). As a result pesos will drop in value against dollars again.

3) If 2) happens full dollarization will set in, no export/import company will trade in anything but hard currency anymore. Either import and export come to a stop or a large black market is created (most likely). As a result all people with peso incomes will suffer.

4) If 2) happens, it will have a dramatic effect on black market prices of imported goods. They will soar and even basics will be come unpayable for most people on peso incomes.

5) If dollarization occurs, Hippo loses control over the money machine. As diuscussed before, this is not good for him.

This sounds like a good plan for a revolution in the long term.

Interesting side note; the lowering of the dollar versus the peso for now is good for the governement to increase their supply of dollars (if they can find sellers) in order to start paying the certificates and loans they are due in 2004.

Given a strong influx of dollars over the festive season the disparity between real and ordered exchange rate shouldn't be to great.

If Hippo abandons the decree after New Year not to much damage is done. Given the fact that dollarization is not in his best interest I think it will be abandoned after the New Year.

Does this guy get his economic advisors from Cuba and Argentina?

Give this guy Hippo and his government a copy of Financial Markets For Dummies.

Probably to compllicated or........ they are creating opportunites for embezzelment on purpose (I think the last)

It's amazing...

I always thought that DR1 was full of intelligent people. I now have my doubts. You people could not comprehend the intricacies of our economy nor could you understand how brilliant an idea this is. Can't you people remember that a few months back Hipolito decreed that apagones stop? If it hadn't been for this we would still be having apagones in this country to this day.

Go Hipolito!