The process of lowering prices, which would be expected given the 31.5% reduction in the cost of a dollar, has fallen far short of that mark. Since last August, prices have fallen by scarcely 2%. This reality has reduced the impact that the lower dollar has had on retail sales and converted the local marketplace to one of very high prices. The absence of lower prices also lessens the impact of the very low inflation rate that was calculated by the Central Bank to be just 0.93%, YTD. When compared to the 65.29% inflation that took place between May 2003 and May 2004, the lack of lower prices is even more impressive. According to El Caribe, the only explanation for the lack of better prices for the consumers is the demand for wider profit margins by the merchants. Edwin Ruiz, the El Caribe journalist who has been looking at consumer prices, points out that back in the last quarter of 2004, traders argued that in order for lower prices to be reflected in the consumer markets, they had to renew their inventories with dollars purchased at the new, lower, exchange rate levels. They estimated that such a process would take three months. Last November the Central Bank calculated that the average exchange rate was RD$30.13 pesos to the dollar, and over the past seven months it has only gone down by about a peso. However, it has been seven months since the merchants promised new pricing, but this has not happened. A hamburger that cost RD$80.00 two years ago is now RD$200.00. The journalist also points out that the increase in the VAT to 16%, the increase in salaries and the further increase in the electric rates all influence the high pricing now in vogue.