The Central Bank (BCRD) reported that between January and July 2022, the remittances received reached a figure of US$5,669.7 million, an amount that exceeds by US$1,572.0 million the remittances of the first seven months of 2019, the period prior to the start of the Covid-19 pandemic, and in which the United States did not yet have the aid schemes implemented after March 2020 and ended in September 2021.
The monetary institution specifies that, therefore, when comparing the flows received as of July 2022 with those of the same period in 2021, a reduction of some US$490 million is observed.
In July 2022, remittances totaled US$808.6 million, whose figures reaffirm the establishment of a new level of monthly remittance flows of around US$800.0 million.
“In that sense, when comparing this amount of July 2022 with the average value in the same month for the period prior to the 2015-2019 pandemic, which was US$533.1 million, a significant increase is observed,” indicates the BCRD in your report.
He 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 84.2% of the flows in July came from that country, a month that registers a growth of 528,000 jobs in the American economy.
In the US, unemployment has decreased from 3.6% in June to 3.5% in July 2022. Particularly, he adds, the unemployment of Hispanics in the US fell from 4.3% in June to 3.9% in July.
From Spain, 6.3% of remittances arrive, second country in terms of total residents of the Dominican diaspora abroad, as well as Haiti and Italy with 1.3% and 0.8% 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, 33.9%, followed by the provinces of Santiago and Santo Domingo, with 14.3% and 8.9%, respectively. This indicates that more than half (57.1%) of remittances are received in the metropolitan areas of the country.
As of July 2022, according to the gender of the recipient, men predominate, with 52.3%. Women captured the remaining 47.7% of remittances received through formal channels.
The BCRD reaffirms that the evolution of the external sector for this year will be characterized by the dynamism of remittances, exports, foreign direct investment and the recovery of tourism, highlighting that, in recent months, this activity has continuously registered record figures in tourist arrivals.
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These events will contribute to a greater flow of foreign currency to the country and will help maintain the relative stability of the exchange rate that is currently observed, in such a way that the exchange rate showed an appreciation of 5.3% at the end of July compared to December 2021. All these elements, together with the country’s robust macroeconomic fundamentals, indicate that the Dominican Republic has particularly favorable conditions to accommodate external shocks arising from a complex and uncertain international environment.
The institution indicates that this greater flow of foreign currency has also allowed the accumulation of international reserves, which by the end of July 2022 were placed above US$14.1 billion, representing around 13.0% of GDP and equivalent to about 6.0 months of imports. These metrics exceed the levels recommended by the IMF, helping the Dominican Republic to maintain a favorable external position, projecting a flow of remittances for the end of 2002 of around US$10,000 million.
