Peso Vs Dollar
Still with all the talk going on, the peso in DR is better than the dollar. Here are the inflation multipliers since 1980 used by the government for economic planning:
1980=28.94
1981=24.74
1982=23.03
1983=20.41
1984=19.33
1985=13.38
1986=10.22
1987=9.79
1988=7.98
1989=5.1
1990=3.8
1991=2.1
1992=1.96
1993=1.86
1994=1.81
1995=1.59
1996=1.45
1997=1.40
1998=1.29
1999=1.20
2000=1.14
2001=1.04
2002=1.00
If you read a report today from our Central Bank you will notice that the Consumer Price Index for January of 2002 was the lowest in the last 10 years(0.57) and the measured annual inflation for 2001 was a mere 4.38% also the lowest in a decade. This is even considering the Sept. 11 WTC events, a down US economy and economic upheaval around the world, including the Argentinian, Venezuelan and Brazilian economic disasters. Today it takes about 800 Bolivares to buy a dollar in Caracas. Last year you could buy one for 578. You need to carry a truck full of Argentinian pesos to buy a dollar. $18 Dominican pesos for a dollar is a terrific value. Think about it...an imported Danon Yogurt full of fruit will cost you exactly $18 in our most expensive supermarkets. How much does it cost in the USA? Not much of a difference. But a plantain costs almost $20 pesos in the USA, while you can get one here for $2 pesos. A banana costs US$0.05 cents!!!! An Avocado US$0.25 cents!!! While rent and transportation is expensive in DR our taxes pale in comparison to the USA. There are no taxes on capital gains from bank certificates. Dominicans begin to pay income taxes after earning over $10,000 Dominican pesos a month. The vast majority do earn that much and yet make a living.
Banks holding certificates of investments in DR are the strongest in the region, including Central America. Banco Popular is #2 in the region,Banco de Reservas is #5, Baninter is #8, Banco BHD #11 and Banco del Progreso is #15. The rest of the top 20 are mostly in Costa Rica and El Salvador, two tiny nations that cannot compare with DR in power and potential. If you invest in pesos even at the lowest interest rates in years(15%) and the possibility of climbing again, as it is happening now, you cannot lose investing in pesos, specially if you reinvest your capital gains. Does it surprise you that a person with US$500,000 invested in the same type certificate in the USA can only expect about $25,000 a year and barely beat the poverty line, while in the same situation the person would be a Dominican millionaire?
In a practical reality, that is why I left the United States. I found myself with money in the bank but I had to continue working for the rest of my life living a simple middle class existence and waiting for a retirement check god knows when. While in DR I do not have to work for a living and I can finance my own retirement.
The multiplier above gives you an idea of what some people have said about the difference between the 1980s and now. The peso has remained very stable with barely the increases due to inflationary trends natural of any currency in the world, except that ours right now, is the most solid currency in Latin America and one of the most profitable in the world, if not the best. This is Singapour at its best.
TW
