The Central Bank (BCRD) reports that in January 2022 the remittances received reached a figure of US$759.3 million.
The BCRD highlights that this amount exceeds by US$172.4 million and US$222.2 million the remittances received in January 2020 and 2019, respectively, periods in which the aid schemes that were implemented after March 2020 were not yet available and that They ended in September 2021.
The entity indicates that, however, these values represent a slight year-on-year decrease of 4.2% compared to January 2021. This result indicates that remittance flows are adjusting to a new level, higher than the average prior to the pandemic, although somewhat lower than that observed between March and September 2021, a period that was characterized by significant specific fiscal stimuli that sought to combat the economic effects of covid-19.
The issuing entity explains that the conditions of the labor market in the United States is one of the main factors that continues to affect the behavior of remittances, since 83.1% of the flows in January came from that country.
During January, the unemployment rate increased slightly to 4.0%, from 3.9% in December 2021. Particularly, the unemployment of Hispanics in the United States did not change in January, remaining fixed at 4.9 percent. This behavior of unemployment suggests that the disposable income allocated by all those who make up the diaspora to remittances did not increase. Consequently, to sustain the flows to the country, they may have accessed their savings to support their families, once again evidencing the strong commitment of the diaspora to their homeland.
The BCRD also highlights the receipt of remittances from other countries, such as Spain, in the order of 7.3%, a country that hosts most of the Dominican diaspora in Europe, as well as Haiti and Italy with 1.3% and 1.0% of the flows received. , respectively. The rest of the reception of remittances is divided among countries such as Switzerland, Canada and Panama, among others.
Regarding the distribution of remittances received by provinces, the BCRD indicates that the National District obtained the highest proportion, 34.2%, followed by the provinces of Santiago and Santo Domingo, with 14.0% and 9.2%, respectively. This indicates that more than half (57.4%) of remittances are received in the metropolitan areas of the country.
Analyzing the flows of January 2022 according to the gender of the person receiving, men captured 51.3% and women 48.7% of the remittances received through formal channels.
The BCRD confirms that the perspectives on the conditions of the Dominican external sector remain positive for this year. The maintenance of a significant flow of remittances, the recovery of tourism to pre-pandemic levels, the extraordinary behavior of exports that shows signs of continuing, and the announcement of important foreign direct investment projects, mainly in the tourism sector, will contribute to a greater flow of foreign currency to the country, and therefore, to maintain the relative stability of the exchange rate that is currently observed, in such a way that, as of February 10, the exchange rate showed an appreciation of 0.6% compared to December of 2021.
The institution highlights that, according to the Monetary Program, this expected higher flow of foreign exchange will allow the accumulation of international reserves by the end of 2022 of over US$13,300.0 million, representing 13.4% of GDP and equivalent to 6.5 months of imports. These metrics exceed the levels recommended by the IMF, helping the Dominican Republic maintain a favorable external position.
The Central Bank reiterates that it remains alert to continue taking the necessary measures to guarantee the stability of prices and the foreign exchange market during the process of consolidating the reactivation of the Dominican economy.