Exchange Rate in Dominican Republic
Dominican Republic - Exchange Rate (average of period)
Peso sinks amid weaker external sector and rising uncertainty
The Dominican peso has fallen markedly against the USD in recent weeks, and on 12 June traded at 58.0 per USD, down 5.3% month-on-month and 8.7% year-to-date.
The Covid-19 pandemic is the key factor behind the depreciation. The virus has led to a collapse in tourism, and depressed exports and remittances, all three of which are key sources of foreign currency. Moreover, in response to the pandemic the Central Bank has markedly loosened its monetary stance through rate cuts and extra liquidity, further weighing on the peso. In addition, concerns over the health of the domestic economy and rising uncertainty have boosted the demand for dollars.
In an effort to support the currency, the Central Bank secured roughly USD 650 million in assistance from the IMF and has intervened in the currency market. The Bank also issued a public appeal for calm in late May, urging businesses and citizens to avoid the panic-buying of dollars.
The currency depreciation poses a risk to public debt sustainability, given the sizeable share of foreign currency denominated government debt (roughly half of total government debt according to the IMF). Moreover, the weaker peso is limiting the ability of the Central Bank to lower rates in order to support the economy, and is weighing on FX reserves—which were down USD 2.4 billion from January to May.
Our panelists currently see the peso regaining some ground as the external sector gradually recovers, although the outlook is uncertain, and hinges on the evolution of the pandemic at home and abroad. Our panelists see the DOP ending 2020 at 55.9 per USD and 2021 at 57.8 per USD.
Dominican Republic - Exchange Rate (aop) Data
|Exchange Rate (vs USD, aop)||44.98||45.93||47.31||49.63||51.27|
5 years of economic forecasts for more than 30 economic indicators.
Dominican Republic Exchange Rate (aop) Chart
Source: Dominican Republic Central Bank and FocusEconomics calculations
Dominican Republic Facts
|Exchange Rate||52.96||0.80 %||Jan 01|
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February 1, 2023
Economic activity expanded 3.3% in year-on-year terms in December, which was above November's 2.9% increase. Still, the trend pointed down, with the annual average growth of economic activity coming in at an over one-year low of 4.9%, down from November's 5.5% reading. Lastly, on a seasonally adjusted month-on-month basis, activity expanded 0.2% in December, markedly below the prior month’s 1.4% increase.
January 15, 2023
Inflation edged up to 7.8% in December from November’s 7.6%.
January 1, 2023
Economic activity rose 2.9% compared to the same month of the previous year in November, which was a deterioration from October’s 3.8% annual expansion.
December 29, 2022
At its last meeting of the year on 29 December, the Central Bank of the Dominican Republic (BCRD) opted to leave the policy rate unchanged at 8.50%.
December 5, 2022
Inflation came in at 7.6% in November, down from October’s 8.2%.