Santo Domingo.- In January 2024, the Central Bank of the Dominican Republic (BCRD) reported a noteworthy increase in remittances, totaling US$874.1 million. This marked a 9.0% surge compared to the same month in the previous year and a substantial 15.1% rise when compared to January 2022.
The BCRD attributed this surge in remittances to the robust economic performance of the United States, as 85.7% of the formal flows, amounting to US$641.1 million, originated from that country. The United States’ stable economic indicators, including a 3.7% unemployment rate and a consistent expansion of the services sector, where a significant portion of the Dominican diaspora is employed, played a pivotal role.
Other countries also contributed to remittance inflows, with Spain leading the pack at US$42.3 million, constituting 5.7% of the total. Haiti and Italy followed with 0.8% and 0.7%, respectively. Additional contributions came from countries like Switzerland, Canada, and Panama.
Regarding the distribution of remittances by provinces, the National District received the lion’s share at 36.7% in January. Santiago and Santo Domingo followed with 13.6% and 7.8%, respectively, revealing that over half (58.1%) of remittances are concentrated in the metropolitan areas.
The BCRD underscored the vital role of remittances as a crucial support line for recipient families, directly impacting poverty reduction and inequality. In January, 94.3% of remittances were allocated to household expenses, aligning with previous studies by the Center for Latin American Monetary Studies (CEMLA). The remainder was directed towards paying off household debts.
Payment methods for formal remittances predominantly involved cash (93.2%), followed by debit cards (5.4%), with bank transfers and credit notes accounting for the remaining 1.4%.
Looking ahead, the BCRD anticipates a positive trajectory for foreign exchange earnings in 2024, encompassing tourism, foreign direct investment (FDI), exports, and remittances. Estimated figures for remittances and FDI flows by year-end are around US$10.400 million and US$4.500 million, respectively. These inflows contribute to the observed relative stability of the exchange rate, with the national currency experiencing a marginal 1.2% depreciation by the end of January 2024 compared to the close of 2023.
The BCRD emphasized that these increased external income flows have facilitated the maintenance of a robust level of international reserves, reaching US$14,371.3 million by the end of January. This represents 11.7% of GDP and approximately 5.1 months of imports, exceeding the recommended thresholds set by the IMF.
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All money for one has to do absolutely nothing in return or any kind of service and making everything just more expensive and harder for the once that don’t have that luxury.