While the government insists on fixing the purchase price for dollars in the authorized exchange houses and commercial banks, the black market is flourishing. While the Central Bank posts a RD$34-US$1 reference rate, and a US$1=RD$35 sell rate, this is only available for a diminishing number of select bank and exchange house clients. Vimenca was reportedly not selling more than US$50 per transaction to the general public. News reports also indicate that for the general public, the dollar has basically disappeared from the formal market. El Caribe says that a Central Bank officer attributed the scarcity in dollars to the practice of exchange houses and banks of retaining these in order to profit from increases. The unnamed Central Bank officer said there is the practice for exchange houses to buy and sell the hard currency among themselves in order to get around the monetary regulation that obliges them to sell their hard currency stock within 24 hours. The source says that money changers are speculating they will make windfall profits if the currency is allowed to float. On the other hand, remittance company officers say that remittances from abroad have considerably decreased as a result of the lower rate, while others are demanding that the company deliver currency in US$ to the beneficiaries, for which the companies have less dollars to trade in the market. As reported in El Caribe, the Central Bank source says that generally US$25 million dollars a day enter the local market. He said in December, this increases to US$35-US$45 million a day.
According to economist Frederic Emam Zade the real rate of the peso should be around RD$32 to US$1. The main reasons for the hyped real market rate is the lack of confidence of the general public in the government’s economic policies and the excesses in money in circulation not substantiated by international reserves. Reportedly, the government this year has printed excess money for RD$98 billion. For the current official reference rate, see http://www.bancentral.gov.do