so the exchange rate is basically the same as it was one year ago

Sep 19, 2005
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And it hasnt strayed very far from that basic figure for most of the year...at least for the little checking I just did.

what is that saying?

the goverment met a goal and stableized the currency to the dollar?

I notice that the candian dollar is equal to the US dollar, but the RD$ hanst moved much.

does the fluctuation in the dollar world wide have any effect on what the exchange rate is in the DR????

when I first went to the DR , the rate was 16-1.......(about 5 years ago)

bob
 

Rocky

Honorificabilitudinitatibus
Apr 4, 2002
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www.rockysbar.com
And it hasnt strayed very far from that basic figure for most of the year...at least for the little checking I just did.

what is that saying?

the goverment met a goal and stableized the currency to the dollar?

I notice that the candian dollar is equal to the US dollar, but the RD$ hanst moved much.

does the fluctuation in the dollar world wide have any effect on what the exchange rate is in the DR????

when I first went to the DR , the rate was 16-1.......(about 5 years ago)

bob
As the US dollar has lowered in value in the last year, and the exchange rate has remained somewhat the same, I would say that it means that our pesos has devalued too, as compared to the world market.
 
Feb 7, 2007
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Just look at Euro, it is at 46.7, it was 43.something in the beginning of the year

As the peso is "virtually" pegged to Dollar (via a currency basket consisiting of dollars) it mainly stays flat againsta dollar, but moves againts other currencies.




From my previos post May 2007:

Countries that do not have fully convertible exchange rates (such as DR) use currency baskets. To achieve full convertibilty, currency must have both internal and external convertibility. Internal convertibility means ability to echange freely from/to foreign currency within a country. External means - outside of country. DR Peso does have internal, but not external convertibility. It also uses a currency basket (mainly comprised of US Dollars. After reading what the currency basket is below, you will understand why the Peso rate has not changed much as compared to dollar as a free (fully convertible) currency (not using a currency basket) would.

Currency basket:
In the context of international exchange, currency baskets are in place particularly as an alternative to the fully convertible (free) rate of exchange in connection to an individual currency. The portion (and importance) of the currencies contained in the basket depends on their meaning for the committing country. The rates of exchange of the domestic currency in relation to the currencies contained in the basket then result proportionally into the rate of exchange of the inland currency to currencies outside the currency basket. A goal of the monetary policy is it to keep the course between inland currency and currency basket constant.

This is an adjusted web translation.

For example, Argentinean Peso has been the same over the last year (May 25, 2006 through May 25, 2007), 3.05 then, 3.08 now. The interlinking between Argentinean and US economy has bene long known, ever since Argentine peso was pegged to dollar at 1:1 up to 2002. Argentina also has internal convertibility, but not external one, and uses a currency basket mainly comprised of US Dollars.

Brazilian Real got appreciated by 10% (2.128 then, 1.98 now).

For FX history, look here
FXHistory - Historical Currency Exchange Rates

For Dominican peso, May 25, 2006 we were at 33.6, today we're at 32.6

All these are interbank exchange rates. For RDP, to get actual rate, discount 0.5 points to 0.6 points from the published rate.

Also, note, Euro appreciated 7% against dollar in last year (May 25, 2006 to May 25, 2007) from 1.27 to 1.36, whereaes about listed Peso rate only adjusted 3%. Compare, however, Brazilian Real that adjusted 10%.

Anyone interested in learning more about exchange rates
Exchange rate - Wikipedia, the free encyclopedia

In context of peso/dollar and convertibility, because it has only internal convertibility, it is the internal (local) market that determines peso/dollar exchange rate, by means of supply and demand of both pesos and dollars. It is not the external (international market) that affects the peso/dollar exchange rate. So, for example, an inflation in Russia or deflation in Japan would not have any (or if any, only very marginal) impact on peso/dollar exchange rate. On the other hand, it would have effect on dollar/euro rate, which are fully convertible and tradeable internationally.

In effect, having non-convertible currencies and using currency baskets (as ooposed to free float) allow the currency to be cushioned from external factors possibly affecting exchange rate, and allow the central bank to more easily manipulate the currency exchange rate by buying/selling the local currency or dollars, in addition to having other monetary tools (such as increase/decrease in interest rates) at their disposal. Can you imagine US Fed trying to buy dollars on an international market (London, Frankfurt, Hong Kong, Sydney, Tokyo, New York, Chicago at the same time) to affect the dollar/euro exchange rate? It's much easily done in a closed environment (local market only).
 

Ken

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Jan 1, 2002
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As someone who lives here, I am glad the rate of exchange is stable. There are small ups and downs, but basically it is stable. Thanks to the stable peso, I have noticed decreases in the prices at Playero Supermarket.