Dominican Republic Sees 5% Increase in Remittances

• The Central Bank of the Dominican Republic (BCRD) reported that remittances received between January and May 2024 totalled US$4,382.3Mn, marking a 5.0% increase compared to the same period the previous year.
• This continues the trend of year-on-year growth in remittance flows observed in 2023. In May alone, US$887.1Mn in remittances were received, a 0.7% increase over May 2023. These funds from the diaspora significantly impact consumption, investment, and the financing of the most vulnerable sectors in the country.
• The BCRD attributes the behaviour of remittances largely to the economic performance of the United States, from which 87.3% of formal remittances in May originated, amounting to US$713.8Mn.
• Remittances also came through formal channels from other countries, including Spain (US$39.4Mn, 4.8% of the total), Haiti (1.0%), and Italy (0.7%). Additional countries contributing to remittances included Switzerland, Canada, and Panama.
• Looking at the broader external sector, the BCRD expects foreign exchange earnings to grow favourably in 2024, driven by tourism, foreign direct investment (FDI), exports, and remittances.
• Estimates suggest that remittances and FDI flows will reach approximately US$10.4Bn and US$4.5Bn, respectively, by the end of the year. These inflows contribute to the relative stability of the exchange rate, with the national currency depreciating by 1.9% by the end of May 2024 compared to the end of 2023. Furthermore, increased external income flows have helped maintain robust international reserves, which stood at US$13,937.5Mn at the end of May, covering about 5.0 months of imports and equivalent to 11.3% of GDP, exceeding IMF-recommended thresholds.

(Source: Dominican Today)