Street foreign exchange markets peaked on Friday at RD$14.65. Bank rates continue to be at the RD$13.90-95 level. Analysts attribute the increase in the bank and street rate differential to speculation, with Dominicans buying dollars in the belief that the peso is said to be overvalued. The decline in the dollar-peso relation is also attributed to: (1) the new restrictions on remittances to the D.R. from the United States, given new banking and remittance regulations imposed by the U.S. government to reduce money laundering. (2) Free zone industries that took collective vacations reducing their usual injection of funds to the local bank markets. (3) Christmas sales were unexpectedly good and importers are purchasing dollars to renew their inventories.
