These metrics exceed the levels recommended by the IMF, contributing to the Dominican Republic maintaining a favorable external position, projecting a remittance flow of around US$10 billion by the end of 2002.
SANTO DOMINGO.– The Central Bank (BCRD) reported that between January and July 2022, remittances received reached US$5,669.7 million, an amount that exceeds by US$1,572.0 million the remittances of the first seven months of 2019, a period prior to the start of the Covid-19 pandemic, and in which the United States did not yet have the aid schemes implemented after March 2020 and ended in September 2021.
The monetary institution specifies that, therefore, when comparing the flows received in July 2022 with those of the same period in 2021, a reduction of about US$490 million is observed.
In July 2022, remittances totaled US$808.6 million, figures that reaffirm the establishment of a new level of monthly remittance flows of around US$800.0 million.
“In that sense, when comparing this amount for July 2022 with the average value in the same month for the pre-pandemic period of 2015-2019, which was US$533.1 million, a significant increase is observed,” the BCRD indicates in its report.
He explains that the conditions of the United States labor market are one of the main factors that continues to influence the behavior of remittances, since 84.2% of the flows in July came from that country, a month that registered a growth of 528,000 jobs in the North American economy.
In the US, unemployment has decreased from 3.6% in June to 3.5% in July 2022. Specifically, it adds, unemployment among Hispanics in the US fell from 4.3% in June to 3.9% in July.
Spain accounts for 6.3% of remittances, making it the second largest recipient country of Dominican diaspora residents abroad. Haiti and Italy follow with 1.3% and 0.8% of remittances received, respectively. The remaining remittances are distributed among countries such as Switzerland, Canada, and Panama, among others.
Regarding the distribution of remittances received by province, the Central Bank of the Dominican Republic (BCRD) indicates that the National District received the largest share, 33.9%, followed by the provinces of Santiago and Santo Domingo, with 14.3% and 8.9%, respectively. This indicates that more than half (57.1%) of remittances are received in the country's metropolitan areas.
As of July 2022, according to the recipient's gender, men predominated, accounting for 52.3%. Women received the remaining 47.7% of remittances through formal channels.
These developments will contribute to a greater flow of foreign currency into the country and will help maintain the current relative stability of the exchange rate, which showed an appreciation of 5.3% at the end of July compared to December 2021. All these elements, along with the country's robust macroeconomic fundamentals, indicate that the Dominican Republic has particularly favorable conditions to accommodate external shocks from a complex and uncertain international environment.
The institution indicates that this increased flow of foreign currency has also allowed for the accumulation of international reserves, which, as of the end of July 2022, stood at over US$14.1 billion, representing approximately 13.0% of GDP and equivalent to about 6.0 months of imports. These metrics exceed the levels recommended by the IMF, contributing to the Dominican Republic maintaining a favorable external position, with projected remittance flows of around US$10 billion by the end of 2022.
