The Central Bank of the Dominican Republic (BCRD) reports that, between the months of January and August 2022, the remittances received reached a figure of US$6,518.8 million.
Likewise, it highlights that this amount exceeds by US$1,792.8 million the remittances received in the first eight months of 2019, the period prior to the start of the COVID 19 pandemic, in which in USA The aid schemes that were implemented after March 2020 and ended in September 2021 were not yet available, which is why, when comparing the flows received as of August 2022 with those of the same period in 2021, a reduction is observed of about US$512.9 million.
In the month of August 2022, the remittances totaled US$849.2 million, higher than those received in the months of June and July. These figures reaffirm the establishment of the new level of monthly remittance flows around US$800.0 million.
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In that sense, when comparing this amount of August 2022 with the average value in the same month for the period prior to the pandemic from 2015-2019, which was US$527.7 million, a significant increase is observed.
The Central Bank explains that the economic performance of the United States (USA) It is one of the main factors that continues to affect the behavior of remittances, since 84.0% of the flows in August came from that country.
During said month, the non-manufacturing PMI of the Institute of Management and Supply (ISM, for its acronym in English) registered an increase going from 56.7 in July to 56.9 in August, thus evidencing the continuous expansion of the services sector of the North American economy, a sector in which the Dominican diaspora in the US is generally employed.
The BCRD also highlights the reception of remittances from other countries, such as Spain, in the order of 6.2%, second country in terms of total residents of the Dominican diaspora abroad, as well as Haiti and Italy with 1.3% and 0.8% of the flows received, respectively.
The rest of the reception of remittances is divided among countries such as Switzerland, Canada and Panama, among others. It is worth noting that remittances received from Europe have been affected to a certain extent by the depreciation of the euro against the dollar, as well as by geopolitical conflicts.
Regarding the distribution of remittances received by provinces, the BCRD indicates that the National District obtained the highest proportion, 34.1%, followed by the provinces of Santiago and Santo Domingo, with 14.3% and 9.0%, respectively. This indicates that more than half (57.4%) of remittances are received in the metropolitan areas of the country.
Analyzing the flows of August 2022 according to the gender of the recipient, men predominate, with 52.9%. Women captured the remaining 47.1% of remittances received through formal channels.
After evaluating the recent evolution of the external sector, the BCRD estimates that during the rest of the year said sector will maintain a dynamic flow of remittances, tourism, exports and foreign direct investment.
This will contribute to a increased flow of foreign exchange country and will help maintain the relative stability of the exchange rate that is observed today, in such a way that the exchange rate showed an interannual appreciation of more than 7.0% at the end of August 2022.
The institution highlights that this greater flow of foreign exchange has also allowed the accumulation of international reserves, which by the end of August 2022 were placed above US$14,000 million, representing around 12.5% of GDP and equivalent to about 5.8 months of imports. These metrics exceed the levels recommended by the IMF, helping the Dominican Republic maintain a favorable external position.
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All these elements, together with the robust macroeconomic fundamentals of the country, indicate that the external sector of the Dominican Republic has particularly adequate conditions to accommodate the shocks coming from a complex and uncertain international environment, projecting that this sector would close 2022 with remittances close to US$10,000 million, exports with record figures of around US$14,000 million, income from tourism above US$8,000 million, and FDI of more than US$3,500 million.
The Central Bank reiterates that it remains vigilant to continue taking the necessary measures to counteract the impact on the Dominican economy of the prevailing challenging international environment, in order to guarantee the stability of prices and the foreign exchange market.
