banking question

Darlene Wheeler · #1 11-20-2003, 08:42 PM

I am interested in putting about $10,000 USD into a peso account. What would be the best (and safest) bank to do this in the cabarete area ? Also what are the interest rates and do they pay the interest monthly ? Any suggestions for getting a safe 15% return ? Thank you.

Ken · #2 11-20-2003, 08:59 PM

See posts by Chris and Escott in this thread Investing

Do not put your money in pesos. Keep it in dollars. Less than a year ago the rate of exchange was about 18 to 1. Now it is 40 to 1. Had you sold your dollars to buy pesos when it was 18 to 1, how much of your $10,000 would you have left.

Darlene Wheeler · #3 11-21-2003, 08:46 AM

If I had bought $ 10,000 USD in pesos now and the rate drops to 18:1 I will double my money, correct ?

BushBaby · #4 11-21-2003, 10:20 AM

Check the count6ries history for RD $'s strengthening against the US $!!! Happened for a short time in 1990 I gather but lasted for just a short time.

For the past year the peso has been devaluing at an alarming rate due to this Government borrowing money all over the place & it will certainly not improve before they are out of power. Governmental decree might last for a month or two, but there is so little confidence in the pseso, NONE in this Governments economic policies, that the pesos would imediately drop again if they DID try to revalue it. How on EARTH, can the government revalue when they have all the loans out anyway?? It would KILL the exportes (& we need them for the US $ flow), it would all but stop the tourist market (by making this country much more expensive to visit) & prices in shops etc would not come down one jot!!

The incoming Government will not be able to make an immediate impact on revaluation either - see above reasons. Look to a possible (& I mean "possible" revaluation in 2005 or 6 at the earliest!!

PLEASE, do yourself a favour & think US $'s, Euros or even £'s Sterling for investment purposes. If you want to loose money quickly, THEN you can invest in Pesos!! Why do you think we have the run on the US $ at the moment?? ALL the Governmental heads have bought US $'s & are holding them off-shore, only bringing in every 3 months or so to top up their personal incomes!! PM or e-mail me if you want more. - Grahame.

Keith R · #5 11-21-2003, 10:22 AM

Quote:

Originally posted by Darlene Wheeler
If I had bought $ 10,000 USD in pesos now and the rate drops to 18:1 I will double my money, correct ?

More than double, but it ain't going to happen. The peso will probably never see under 30:1 again, much less go to 18:1. Putting US$10,000 into a peso-denominated account in a bank in the DR right now is tantamount to throwing your money away.
Regards,
Keith

Escott · #6 11-21-2003, 10:45 AM

Quote:

Originally posted by Darlene Wheeler
If I had bought $ 10,000 USD in pesos now and the rate drops to 18:1 I will double my money, correct ?

I would sooner bet it will be at 50 to 1 before it goes to 25 to 1.

Good luck

ricktoronto · #7 11-21-2003, 12:13 PM

Quote:

Originally posted by Darlene Wheeler
I am interested in putting about $10,000 USD into a peso account. What would be the best (and safest) bank to do this in the cabarete area ? Also what are the interest rates and do they pay the interest monthly ? Any suggestions for getting a safe 15% return ? Thank you.

I will be happy to give you 15% in pesos for $10,000 US since in three or six months I can just go to a cambio and buy the pesos I owe you (with YOUR money) for 1/2 of what you originally thought you had. And then I keep the rest of the US you gave me.

People have to quit with the big-eyed 15% is great vs. US interest rates attitude since people (not just you) completely overlook that the 15% more pesos are worth 40% less due to the devaluation when the deposit is up.

ricktoronto · #8 11-21-2003, 12:16 PM

Quote:

Originally posted by Darlene Wheeler
If I had bought $ 10,000 USD in pesos now and the rate drops to 18:1 I will double my money, correct ?

What source of intelligence (and on the subject of the peso gaining ground I use the word loosely) do you have to suggest this will happen?

BTW if it drops to 1:1 you'll be rich!! woo-hoo! Buy that Mercedes!!!

If they do what Mexico did and lop off a zero at some point it hasn't gained value they change the currency to be worth 10X the original amount. But it isn't worth more in a real hard currency.

Darlene Wheeler · #9 11-21-2003, 10:26 PM

already have the mercedes

lhtown · #10 11-21-2003, 11:17 PM

Even if I had 100% confidence that the newly elected leader of the DR was an economic whiz and would do everything right and had all of the backing he needed, I wouldn't count on the peso going down from where it is today anytime in the near future. I would think that it might stabilize at current levels if that were to happen- not that it even could or would happen.