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
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Exchange Rate (vs USD, aop) | 44.98 | 45.93 | 47.31 | 49.63 | 51.27 |
Dominican Republic Exchange Rate (aop) Chart
Source: Dominican Republic Central Bank and FocusEconomics calculations
Dominican Republic Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 52.96 | 0.80 % | Jan 01 |
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Economic News
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Dominican Republic: Inflation hits highest level in nine years in January
February 15, 2021
Consumer prices rose 0.97% in January over the previous month, accelerating from December's 0.48% increase.
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Dominican Republic: Decline in economic activity softens in December
February 2, 2021
Economic activity slid 1.0% year-on-year in December (November: -3.4% yoy).
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Dominican Republic: Central Bank keeps rates steady in January
January 31, 2021
At its end-January meeting, the Central Bank (BCRD) kept the policy rate at 3.00% for the fifth month running, following easing last year in the form of liquidity injections and 150 basis points of rate cuts. The decision not to cut further was likely influenced by improving domestic and external dynamics lessening the need for further stimulus: Domestically, the contraction in economic activity moderated in December, while externally, many economies performed better than expected towards the end of last year, and the vaccine rollout is supporting optimism over global growth ahead.
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Dominican Republic: Inflation hits highest level since July 2013 in December
January 14, 2021
Consumer prices rose 0.48% over the previous month in December, which was below the 0.60% rise recorded in November.
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Dominican Republic: Central Bank keeps rates steady in December
December 30, 2020
At its end-December meeting, the Central Bank (BCRD) kept the policy rate at 3.00% for the fourth month running, following sizable easing earlier in the year. The decision not to cut further was likely influenced by improving domestic dynamics, with the decline in economic activity continuing to moderate through November.
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