The Central Bank of the Dominican Republic (BCRD) reported this Tuesday that the International reserves Net (RIN) reached US$14,436.50 million at the end of 2022, the highest level recorded for a year-end in the country’s economic history.
The institution highlights that international reserves exceed the metrics suggested by the International Monetary Fund, reaching more than 12.7% of gross domestic product (GDP) and almost six months of imports.
The BCRD indicates that this strengthening of the reserves is a reflection of the notable dynamism of the sectors that generate foreign currency.
In addition, there is the robust macroeconomic climate and the important role of monetary and exchange policies implemented by the Central Bank, as well as timely debt management by the Ministry of Finance.
The good performance evidenced by tourism is highlighted, whose income is in the order of US$8,670.7 million at the end of the year.
Meanwhile, national and free zone exports are expected to reach a record figure of US$14,200.00 million, while family remittances would represent foreign exchange earnings to the country for approximately US$10,000 million.
The BCRD expects Foreign Direct Investment (FDI) to continue showing favorable behavior.
It is estimated that they will be around US$4,000.00 million, which, accompanied by other income from services of around US$3,000.00 million, and that will allow the country to register foreign exchange income of approximately US$39,300.00 million in 2022.
On the other hand, the timely implementation by the BCRD of the monetary restriction plan to mitigate inflationary pressures has contributed to maintaining a favorable differential with respect to the local interest rates of our main commercial partners, contributing to greater capital flows and encouraging savings in national currency.
Indeed, a greater volume of operations was registered with foreign investors for an amount greater than US$500.00 million, who took advantage of the attractive differentials in interest rates and the strength of the macroeconomic fundamentals of the Dominican Republic.
These important foreign currency flows contributed to the Dominican peso appreciating by 2.0% during the year 2022, and made evident the existence of incentives for instruments denominated in Dominican pesos.
The current levels of International Reserves will allow the Central Bank to continue contributing to the exchange rate stability that has characterized the Dominican economy in recent years.
In addition, these reserves will make it possible to face any external shock that could affect the domestic foreign exchange market, in order to avoid exacerbated pressures on the exchange rate and to promote a climate of certainty in local economic agents, foreign investors and in the general public.
The Central Bank reiterates its commitment to act firmly and in a timely manner to guarantee price and exchange market stability.