Government agrees to move the rate to 37 to 1

gringo in dr

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May 29, 2003
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Economic recovery indeed.

From the front page, originally from Listin Diario:

Budget set at RD$37 to US$1

The government reported today that it is building its 2005 budget around an exchange rate of RD$37 to US$1. Technical Secretary to the Presidency Temistocles Montas made the announcement today, but said that, nevertheless, the government has not yet sent the bill to Congress, as reported in the Listin Diario.

Montas said the decision to calculate the budget at a rate of RD$37 to US$1 was made after the tourism and free zone sectors asked the authorities to intervene and graduate the appreciation of the peso that last week climbed to RD$26 to US$1 at some exchange posts.

Large sectors of the economy that also depend on remittances are also being affected by the peso's substantial climb since the Fernandez government took office. While the peso has appreciated, however, the prices of goods and services have been slow to drop, in part reflecting the skepticism of the private sector regarding the new rate, the higher cost of doing business and presumable attempts to net themselves a windfall from the higher yield on sales.

According to the Central Bank's daily report, the US peso was commanding RD$27.66 to US$1 today.

Speaking on the El Gobierno de la Manana radio program, Montas also announced further increases to the power rates. He said that those who pay for the service could expect rate increases of 30% next year.
 

Pib

Goddess
Jan 1, 2002
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gringo in dr said:
Speaking on the El Gobierno de la Manana radio program, Montas also announced further increases to the power rates. He said that those who pay for the service could expect rate increases of 30% next year.
Wonderful.
:tired:
"Turn me over, I am done on this side."
St. Lawrence
 

gringo in dr

New member
May 29, 2003
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Pib said:
Wonderful.
:tired:
"Turn me over, I am done on this side."
St. Lawrence


Well come on, we can't expect everyone to pay for their power. We have to cover their tab too.
 

mondongo

Bronze
Jan 1, 2002
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The government has not agreed to move the rate to 37:1, it mere has decreed that it is using that conversion rate to calculate the new budget.

The reason is as follows: Fernandez has already said that the new budget will be ~DR$150Billion. The nominal GDP, in US$, will be somewhere south of US$15 Billion. If you use a 25:1 exchange rate, that gives you DR$375Billion GDP.

That would place Fernandez budget at 150/375=40% of GDP. This is a number that is way too high, even for dangling dopey democracies like the DR's.

The IMF would not stand for this...and as the IMF says, Fernandez goes. You don't have to take my word for it, just read the Central Bank web site....they admit it.
 

Chris

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Oct 21, 2002
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From being very confident and feeling good about the present administration, I think back to a few scant months ago where the hippo announced that the rate will be 34 (I cannot quite remember but think it was 34) and for a few days, the peso nudged higher against the dollar. What is difference here?
 

Texas Bill

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Feb 11, 2003
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It seems to me---

That the recent nosedive of the dollar against the peso is the result of a "backdoor" leak about government intentions. Wouldn't that be logical???
That way, the speculators can get a lot of dollars while not paying many pesos for same.
A bit of conspiracy, perhaps???

Texas Bill
 

sjh

aka - shadley
Jan 1, 2002
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This whole thing is all a setup. Those with enough cash (really rich people, governments, banks, etc) to control the market jack the price up and down buy dumping/buying/printing money/shorting/borrowing/etc while moving money in and out in their own favor. It happens in markets all over the world and the "technical" term I learned for it is "wanking" the market.

The extreme moves are used to get the small timers to panic or force them sell out. I am sure this has many names but i learned it as "a shake out" or "shaking the tree".

As pointed out by someone else earlier: just figure out what benefits the person in control, and that is what will happen
 

duhtree

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Jun 2, 2003
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Could some one tell me who is selling US dollars and at what exchange rate.
Is there a minimum/maximum amount dictated?