Echange rate stable throughout December

MrMike

Silver
Mar 2, 2003
2,586
100
0
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Did anyone else think it was strange that there was little or no variation in the exchange rate (US-DR) during December?

Generally the dollar depreciates against the peso during December because of the larger amount of dollars in circulation in the DR.

Does this mean that people are really and truly broke and not sending Christmas money to relatives? Or does it mean that the exchange rate is being manipulated and the dollar is about to surge now that the holidays are over?
 

RacerX

Banned
Nov 22, 2009
3,390
376
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Or could it mean with the expansion of the "war on terror" the dollar may drop in relation to other world currencies? Maybe 50 pesos to $1 by August?
 

mrchris74

New member
Mar 14, 2006
94
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Or could it mean with the expansion of the "war on terror" the dollar may drop in relation to other world currencies? Maybe 50 pesos to $1 by August?

That would be a weird way for the dollar to ?drop?.

To the OP: The Caribe Tours in Santiago has been paying $36.05 for at least 6 weeks, and yes, it does seem strange. For a while I figured maybe the girl there was too lazy to change the sign. Its enough to make me feel like Iḿ being setup for something.
 

korejdk

Bronze
Dec 29, 2006
647
37
0
Besides the fact that the DOP is pegged to the U$D, Greece is about to be kicked out of the EUR, so the yanks should be the dog's bollocks again shortly...rosbif, brace yourselves...Gordon f&*%ed up big...canoucks - steady...Peace and prosperity !
 

RacerX

Banned
Nov 22, 2009
3,390
376
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Besides the fact that the DOP is pegged to the U$D, Greece is about to be kicked out of the EUR, so the yanks should be the dog's bollocks again shortly...rosbif, brace yourselves...Gordon f&*%ed up big...canoucks - steady...Peace and prosperity !

dogs bollocks? I like that. Can you use other animals also? Horses bollocks? Monkey bollocks?
 

Bob K

Silver
Aug 16, 2004
2,520
121
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Actually the same thing happened last year with the exchange rate holding steady. The two years before a big change. I am not sure why so steady this year agian, but that was ok with me.

Bob K
 
Oct 13, 2003
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instagram.com
The peso is not a floating currency. This basically means that the government set the rate, at what they feel is the best for the country.

It must have been that the governement could not afford to appreciate the dollar. They must have needed dollars to pay.
 

RacerX

Banned
Nov 22, 2009
3,390
376
0
The peso is not a floating currency. This basically means that the government set the rate, at what they feel is the best for the country.

It must have been that the governement could not afford to appreciate the dollar. They must have needed dollars to pay.

I dont buy that.If so then why didnt they keep it at levels it was at in 1999 when it was 14 pesos to a dollar?
 
Oct 13, 2003
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I dont buy that.If so then why didnt they keep it at levels it was at in 1999 when it was 14 pesos to a dollar?

IMF Executive Board Concludes 2009 Article IV Consultation with the Dominican Republic
Public Information Notice (PIN) No. 09/128
November 16, 2009

Directors welcomed the monetary authorities’ commitment to a flexible exchange rate, and took note of the staff assessment that the real effective exchange rate is broadly in line with fundamentals. Given the relatively low level of international reserves, gradually introducing more flexibility within the current managed floating regime would help cushion potential external shocks. Consideration would also need to be given to continued strengthening of the monetary anchor, and Directors supported the authorities’ intention to move to an inflation-targeting regime once the supporting institutional framework has been put in place.

The green part explains why the dollar wasn't appreciated, the red confirms the govt sets the exchange rate.

The government didn't keep it at 1999 levels because there is a double edged sword at play here:

1. the export requires the peso to be cheap i.e. the dollar to be expensive
2. the internal economy (import of consumer goods, oil) and the external debt payments are better served by a strong peso

This is the balancing act the government must make. Therefore the peso will stay between 32 and 37 depending upon the need to make 1 or 2 a priority at the moment.

Cheers,

MD


PS: do we have a buyer?
 
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