Hoy newspaper?s economic editor, Mario M?ndez, says that the devaluation of the peso over the past year amounts to a 77% decline ? a much greater margin of loss than that produced by the peso?s descent throughout the decade of the 90s, which was just 47.5%. Furthermore, the devaluation over the past five months and a few days has been 38.9%, which is in itself nearly equals the total level of lost value from 1990 to 2000.
The devaluation was calculated by taking into account the fact that last June (2002) the exchange rate stood at RD$16.83 to the US dollar, while yesterday one dollar was being offered for sale at RD$29.50. (At the ?fixed price of RD$28.95? there were no dollars to be had.) On the other hand, in 1990 the dollar was being sold at RD$11.13, and by the year 2000 its price had ascended to a mere RD$16.52.
According to M?ndez, the seriousness of the past year?s devaluation is notable not only for the level of decline, but for the velocity in which it transpired. For economic treatise writers, a devaluation has occurred when a currency loses 25% of its value over one year. Here, we have seen such a devaluation three times in the space of one year. M?ndez also cites previous memorable depreciations of the Dominican peso, such as that of 1990 (from RD$6.97 to RD$11.13, or 59.6%) and in 1988, when it fell by 60.1%.
Exchange houses were paying RD$29 to US$1 this morning in Santo Domingo.