Is the Gov't letting the Peso Float? Or is the market catching up?

[jruane44]

Give it a rest clown.

[cobraboy]

Originally Posted by rubio_higuey

Rising interest rates lower the exchange rate. So that would be a mitigating., not supporting factor.

When interest rates rise, foreign capital comes. Foreign capital needs to buy pesos, so there is large supply of dollars/euros/whatever. Large supply of foreign currency (capital inflow) for the same amount of local currency raises the exchange rate of foreign currency to local currency, and lowers (appreciates) the exchange rate of local currency - e.g. 1:35 -> 1:34

When interest rates fall, exchange rates of local currency rise (depreciate).

Example was the U.S. dollar against Euro, where lots of money was moved from the U.S. to outside because U.S. Fed rate was lowered and lowered. The capital outflow resulted in dollar falling against Euro and Pound. The interest rates were lowered to jump start the economy when the recession started, and to easy the wave of bankruptcies.

Now the DR CB is rising the interest rates, which is usually done to stop the exchange rate increase (depreciation) as a mitigating factor (when exchange rate is depreciating too rapidly (negative point) it is a mitigating factor. At Zero point it is a factor affecting appreciation so the exchange rate falls).

Solid post. Kudos.

[hi-tec]

I have some questions about investment at BANCO CENTRAL, based on the following information found at their website, [tired of calling and emailing BC and not being able to get straight answers.]

Banco Central de la República Dominicana


"DOCUMENTACIÓN REQUERIDA PARA APERTURA DE INVERSIÓN:"

"Documentos que evidencien la procedencia de los recursos a invertir"

will the requirement still be valid if arriving at the BC with managers checks from an USA bank?

what kind of evidence will they need?
the USA bank already checked the "procedencia"

"Evidencia del número de una cuenta bancaria en la cual serán acreditados los intereses mensuales, la cual debe estar a nombre del inversionista (Estado de Cuenta, libreta de ahorros o cheque bancario). "

Do that means an account from a DIFFERENT bank?
If so it means going to BANCO RESERVA first [or any other better you suggest]
Thanks

[freeair]

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

we are not in the same country but we also experiencing the downfall of our peso rate..well im just wondering what are the factors that can affect this..

[hi-tec]

hello all,

If any of you have an account at BANCO CENTRAL, i would appreciate what you have to say, your experience there.

My previous post include a few questions, but you can just post whatever info you want..., as an alternative PM and/or email me.

thanks