Goodbye to the peso?
Economist Jose Rafael Abinader thinks that the time has come to replace the Dominican peso with the United States dollar and the euro as it would stabilize the interest rate and allow more investments from the United States and Europe without the problem of exchanging money.
He pointed out that this system works successfully in Ecuador and El Salvador.
Abinader said that the peso has a history of constant devaluations since it served to finance the War of Independence and political reasons such as President Buenaventura Baez’s overspending and Rafael Trujillo, who used the reserves to buy sugar cane plantations for himself.
He said that after Trujillo, parity between the peso and dollar was reestablished until 1984 when an agreement signed with the International Monetary Fund (IMF) led to a 300% devaluation, and since then there has been one devaluation after another and we now stand at RD$43 to one dollar.
He pointed out that it is the savers who suffer most, and especially the pension funds that have more than RD$200,000 million, of which around 85% is in official hands: the Central Bank, the Treasury, BanReservas and the Housing and Production Bank.
He urged President Danilo Medina to start the process of transition from the peso to the dollar and the euro.
Category: DR News |