The Central Bank of the Dominican Republic (BCRD) announced that starting Tuesday, 10 November 2020, it is releasing US$200 million of country hard currency reserves into the foreign exchange market. The injection of cash is in addition to the regular flow of hard currency via the Electronic Currency Trading Platform.
The Central Bank says that the measure is intended to guarantee the timely availability of dollars to supply the demands of the productive sectors in November and December 2020.
The Central Bank says it is seeks to maintain the economy’s reactivation and ensure the flow of foreign currency for vendors to replenish their Black Friday and Christmas inventories in time for the upcoming shopping seasons.
The Central Bank reports it has international reserves of over US$9.7 billion, equivalent to approximately 13% of the gross domestic product (GDP) and coverage of six months of imports. The hard currency reserves exceed the thresholds of 10% of GDP and three months of imports recommended by the International Monetary Fund (IMF). The Central Bank highlights the country’s robust position to face adverse shocks and respond to the progressive recovery in domestic demand.
The Central Bank reports that since May, the flow of US dollars in the Dominican Republic has experienced a constant improvement. Remittances increased during September by 37.1% year-on-year, while exports from free zones expanded by 9.8%. Foreign Direct Investment already exceeded US$2 billion over the first nine months of 2020 and is estimated to surpass US$2.5 billion by the end of the year.
The Central Bank reports on a gradual reactivation of the tourism sector.
“This positive behavior in the foreign exchange generating sectors, together with the successful placement of sovereign bonds for US$3.8 billion and the dynamic participation of the Central Bank in the exchange market, will continue to foster the favorable conditions that have allowed for the relative stability of the exchange rate observed since July,” added the Central Bank in its press release.
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Central Bank
10 November 2020