At the end of 2023, remittance flows received in the Dominican Republic increased by 3.1%, from US$9,856.5 million in 2022 to US$10,157.2 million last year.
The Central Bank of the Dominican Republic (BCRD) reported that the volumes of remittance receipts are in line with its projections. The absolute increase in remittances was US$300.7 million.
In December, a remittance value of US$945.0 million was recorded, with an increase of 0.1% when compared to the same month in 2022. “It is important to note that, during 2023, remittance flows for each month exhibited year-on-year increases,” the governing body said in a press release.
It highlighted that the flow of foreign income has allowed maintaining an adequate level of international reserves, which reached 15,464.3 million dollars at the end of December. This level represents 12.9% of the gross domestic product (GDP) and about 5.8 months of imports, above the thresholds recommended by the International Monetary Fund (IMF), says the note.
Impact of the Diaspora Despite Unemployment
The BCRD explained that the economic performance of the United States was one of the main factors that influenced the behavior of remittances, since 84.2% of the formal remittance inflow in December, some US$681.7 million, originated from that country.
On the one hand, general unemployment in the U.S. stood at 3.7 % in December, remaining at the levels observed before the pandemic, however, unemployment among Latinos increased from 4.8 % in November to 5.0 % in December.
Additionally, the non-manufacturing Purchasing Managers’ Index (PMI) of the Institute for Supply Management (ISM) registered a value of 50.6 in December, closing 2023 evidencing the sustained expansion of the service sector, where most of the Dominican diaspora is employed.
Other remittance senders to the DR
The BCRD also highlighted the receipt of remittances through formal channels from other countries in December, such as Spain, for a value of US$48.0 million, 5.9% of the total, this being the second country in terms of the total number of Dominican diaspora residents abroad.
Haiti and Italy, with 1.3% and 0.8%, respectively, were confirmed as the main senders of the flows received. Of the rest of the remittances received, countries such as Switzerland, Canada, and Panama, among others, stand out.
Regarding the distribution of remittances received by provinces in December, the BCRD indicated that more than half (58.3 %) of the money was received in the metropolitan areas of the country:
National District received 36.1 %.
Santiago, with 13.2 %.
Santo Domingo, with 9.0 %.
“After analyzing the recent evolution of the external sector, the BCRD’s outlook for the close of 2023 contemplates tourism revenues that would exceed US$10 billion, similar to remittances, and that foreign direct investment flows would register some US$4.3 billion,” he highlighted in the document.
Exchange rate stability
The depreciation of the Dominican peso against the dollar was 3.2%.
The Central Bank explained that foreign exchange inflows favored the relative stability of the exchange rate currently observed, such that at the close of the year the national currency depreciated by 3.2 % concerning the close of 2022, below the average depreciation of the last year before the pandemic.
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