Where's Pichardo? Surely this has an upside.
I am sure Pichardo will weigh in from Jackson Hole after the lunch break!
Did you say Jackson Hole??? I'm going there next month for a week, will look for Pichardo and post photos.
While the Cat's away...
There's no upside to anything other than a real good imagination from some people here...
The DR Peso has been under pressure long ago, not the tendency that causes it to shoot down in value, but over that of the US Dollar...
We currently (and since the post Hipolito renaissance) have kept the Peso undervalued about 5% to as much as 10% to the all mighty US Peso...
This was possible by simple economics! In order to remain competitive in US markets, DR goods must retain carried value against the region and most others source markets. The CB eats the % difference in value, using the reserves to cover for the drop in loses to the set exchange rate.
As of lately, the tendency is to let the rate float without supports, since the value has topped off once the better part of the US crisis drove the Dollar over the 5% and within the 10% parity to current levels.
The national debt is compounded as the ratio shrinks and reserves can't hold the depreciating Peso difference on the downturn. Having your peso lose value while a falling economy is upended, is not productive at all...
That's the reason why our inflation index kept in check and still grows in very small percentages to that of the region.
Make no mistake about it, once the economy trends to recovery, the DR Peso will once again find itself under the spell of the CB and their quasi control rate.
While taxes from revenues have fallen, mainly on the imported goods; the tax revenue recovered rate for internal receipts has grown to larger amounts. That's indicative of trends to consume local brands over imports, hence why the local industry is posting above average profits in the internal economy index.
No wonder groups like CCN has been opening JUMBOs, like if they were popping popcorn on a party...
Next year will bring new challenges to our internal revenues collection, as new stages from DR-Cafta enter their effective dates as agreed. Not only that, but we're also aiming to have the Caricom and Cariforum trade agreements in play as well.
The dynamics of currency fielding will change as I posted here before. You'll see how to purchase certain imported goods, foreign currency will be mandated over national to some equations. Releasing the CB from pursuing external currency reserves for the internal markets, is going to be step #1 of the encompassing electronic currency system.
As tariffs and limits come down, the effectiveness of the internal revenues agency must meet the challenges ahead and come out the as the winner.
You shouldn't be worrying about the DR Peso's value, but of becoming adept to dealing in foreign currency and remaining a good value for the cost to clients.
Pesos will always remain the DR currency; just not in paper or metal to be handled other than internally, by banks.
There's a fine way to discover how much the set rate keeps to the actual value of your pesos:
Purchasing parity!!! Using the Mac Index you can find out pretty much the real rate of your Pesos over that in the US Dollars...
...the mice will play!
