The peso has appreciated by more than 7% in 2026, a phenomenon that JP Morgan recommends to investors, but which also makes imported materials cheaper and helps explain the construction boom
SANTO DOMINGO – When JP Morgan recommended on August 20 that its clients take positions in Dominican sovereign bonds maturing in 2033, the central argument was the peso. The firm calculated that the Dominican currency had appreciated by 7.6% so far in 2026 and set a target exchange rate of RD$57 per dollar, compared to the RD$58.47 prevailing when it issued its recommendation.
Behind that figure is a phenomenon that Wall Street investors look at from a financial perspective, but in Santo Domingo it translates into something more concrete: houses that are built faster and at a lower cost.
The Central Bank confirmed, using its own data, the same trend described by JP Morgan, showing that by the end of July, the Dominican peso had appreciated by 8% compared to its projected value at the end of 2015. The entity attributed this performance to the sustained increase in the country's main sources of foreign currency: exports of US$8.746 billion, tourism of US$6.716 billion, remittances of US$6.291 billion, and foreign direct investment of US$3.277 billion, all during the first half of the year.
Together, those lines generated about US$2.8 billion more than in the same period of 2025.
The Central Bank itself explained the mechanism in simple terms: a stronger currency makes imports cheaper, and few sectors depend as much on imported inputs as construction: cement is produced in the country, but steel, aluminum, air conditioning systems, elevators, and a good part of the quality finishes come from abroad.
When the peso gains value against the dollar, those materials cost less in local currency, and that saving is reflected sooner or later in the final price of a home.
The National Statistics Office's Direct Housing Construction Cost Index closed at 240.62 points in July 2026, with a year-on-year increase of just 2.08%. This is a much more moderate pace than in previous years, when the same indicator rose by as much as 7.82% in a single year. This difference coincides with a period in which the peso has steadily appreciated against the dollar.
Construction: unstoppable
The Director General of the General Directorate of Internal Taxes, Pedro Urrutia, presented figures on August 26 during a business luncheon of the Dominican Association of Housing Builders and Promoters and explained that the sector represents 12.2% of the country's economic activity and registered a year-on-year growth of 14.9% in June 2026, an expansion that alone explained about a third of the advance of the Monthly Indicator of Economic Activity that month.
The resources that the financial system channeled towards the construction and purchase of homes reached RD$650,306 million in March, 15.1% more than in the same month of 2025. In fiscal terms, the sector contributed RD$21,226.7 million to the DGII between January and July, equivalent to 3.6% of the country's total tax collection, and declared RD$244,314.7 million in operations subject to ITBIS during the first half of the year.
Urrutia also announced that the DGII will pay before the end of 2026 more than RD$1 billion that the State owes for the Low Cost Housing Bond, a commitment made together with the Ministry of Finance and Economy to support housing projects.
Annerys Meléndez, president of the Dominican Association of Housing Builders and Developers, placed the current situation within a broader context than just the exchange rate. She believes that modernizing the tax administration and simplifying procedures are just as crucial as the exchange rate in sustaining the sector's growth: simpler processes, she said, encourage formalization, boost investment, and enable the sector to continue providing housing solutions for Dominican families.
However, the exchange rate relief has its limits, and the ICDV itself shows that certain materials are resisting the general trend. In July, electrical wire rose 7.51% in a single month, and vaulted ceilings 4.47%, a reminder that the peso's appreciation alleviates overall costs, but does not eliminate the volatility of specific inputs that depend on international supply chains beyond the exchange rate.
It's clear that two stories that are usually told separately—that of the financial markets and that of real estate developers—are linked by the same cause in 2026. The amount JP Morgan recommends buying in bonds is the same amount that, within the country, is allowing for more and cheaper construction.
JP Morgan is one of the world's largest investment banks and financial groups, headquartered in the United States, and is part of JPMorgan Chase & Co., the largest bank in that country by assets.
Its functions include investment banking, asset management, commercial banking, and an emerging markets research area that analyzes currencies, sovereign debt, and economies such as the Dominican Republic to advise its institutional clients (investment funds, asset managers) on where to place their money.
When that research team recommends "taking exposure to the Dominican peso" or "overweighting 2033 bonds," it's a sign that real capital is moving, because funds that follow those recommendations can increase their positions in Dominican debt, which in turn reinforces the demand for pesos and helps sustain the currency appreciation described in the report itself.
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