like a rock without Central Bank intervention.
To be sure, the CB has allowed the peso to weaken against the Dollar and Euro recently. If you look closely, that weakening is directly correlated to the CB's belief about overall inflation in the D.R. So, to give some credibility to the currency they allow it to depreciate according to their perceived (not actual) inflation rate.
Unfortunately, the unbridled and unchecked overspending in the campaign for President, the end of IMF austerity, the tsunami of rising prices for both oil and food, and the continued borrowing by the government against future revenues that may or may not materialize (think tourist dollars/euros), tells me that the peso is starting to look more and more like the peso of 2004, 2005.
A pattern I have noticed of late is the increasing number of threads dedicated to "investing" in CB certificates. For what it is worth, the last time I can recall this many threads about that topic was just prior to the rapid depreciation of the peso.
Respectfully,
Playacaribe2
Quote:
Originally Posted by Texas Bill
Over the last few weeks, I have noticed that the Peso vs the Dollar is inching down/up (??).
A couple of weeksago the rate was around 33/1. Checking today, on FX Converter, I just noticed the rate is 35/1.
Could it be that the Central Bank's manipulation is slipping into a negative mode, or, are market forces finally taking hold and forcing a more realistic exchange rate?
I'm no financier, so will someone please enlighten me.
Texas Bill
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