The reserves exceed the metrics suggested by the International Monetary Fund and are more than 12.7% of GDP and almost six months of imports
The Central Bank of the Dominican Republic (BCRD) reported that Net International Reserves (NIR) 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 (IMF), reaching more than 12.7% of gross domestic product (GDP) and almost six months of imports.
International reserves are the financial resources available to a country to guarantee payments for the goods it imports and debt service, as well as to stabilize the value of the currency.
Its strength represents an important sign of financial soundness and, in turn, contributes to the reduction of sovereign risk.
The BCRD indicates that this strengthening of reserves mirrors the remarkable dynamism of the foreign exchange generating sectors, the robust macroeconomic climate and the important role of the monetary and exchange rate policies implemented by the Central Bank, as well as the timely management of debt by the Ministry of Finance.
It adds that the productive sectors highlight the good performance evidenced by tourism, whose income is estimated at around US $ 8,670.7 million at the end of the year. Similarly, 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 of approximately 10,000 million dollars.
The BCRD points out that Foreign Direct Investment will continue to perform favorably and estimates it will be around US $ 4,000.00 million which, together with other income from services of around US $ 3,000.00 million, will allow the country to register foreign exchange earnings of approximately 39,300.00 million dollars.
On the other hand, the timely implementation by the BCRD of the monetary restriction plan to mitigate inflationary pressures has contributed to greater capital flows and encouraged savings in national currency.
Indeed, there was a greater volume of operations with foreign investors exceeding US$500.00 million, who availed of the attractive interest rate differentials and the strength of the macroeconomic fundamentals of the Dominican Republic.
These important currency flows contributed to the Dominican peso appreciating by 2.0 percent during 2022.
Source:
Hoy