The Dominican Republic received US$748.8 million in remittances in February, a level that was higher than those in 2019 and 2020. In February 2022 remittances were 1.6% less than the record amount received in 2021 for the month. The Central Bank considers that the remittance flows are adjusting to a new level that is still higher than the pre-pandemic average.
The Central Bank attributes the high levels to conditions in the labor market in the United States. 84.5% of the flows in February came from that country. The US unemployment rate dropped slightly to 3.8% during February, from 4.0% in January 2022. Notably, US Hispanic unemployment fell from 4.9% in January to 4.4% in February.
The Central Bank has reported that between January and February 2022, remittances were US$1,508.1 million. The
amount is US$430.4 million and US$325.0 million more than the remittances received in the first two months of 2020 and 2019, respectively, periods in which the aid schemes that were implemented after March 2020 and ended in September 2021 were not yet in place.
Dominicans also receive remittances from Spain (6.5% of total), Haiti (1.2%) and Italy (0.9%), with lesser amounts from Switzerland, Canada and Panama.
Most remittances are sent to individuals living in the larger metropolitan areas — the National District with 33.6%, Santiago 14.3% and Santo Domingo province (9.0%).
Remittances, tourism receipts, direct investments in projects are the main sources of hard currency entering the Dominican Republic. The greater flow of foreign currency has maintained the relative stability of the exchange rate. As of the end of February 2022, the Dominican peso had appreciated 5.3% year-over-year. The Central Bank highlights that all this, together with the country’s strong macroeconomic fundamentals, better positions the country to deal with the adverse shocks arising from the military conflict between Russia and Ukraine.
The Central Bank highlights that this greater flow of foreign exchange has allowed the accumulation of international reserves, which by the end of February 2022 reached the historical figure of US$14.85 billion, representing 14.8% of GDP and equivalent to 7.2 months of imports. These metrics exceed the IMF’s recommended levels, contributing to the Dominican Republic maintaining a favorable external position.
16 March 2022