Dominican Republic received US$874.1 million in remittances during the month of January

During the month of January of this year, remittances to the Dominican Republic reached US$874.1 million, an increase of 9% compared to the same month of 2023 and 15.1% compared to January 2022, as the Central Bank said this Sunday Told (BCRD).

The Supreme Monetary Authority reported that the economic performance of The United States was one of the main factors influencing the behavior of remittances, as 85.7% originated from that country. Formal inflows for the month of January, which comes to about US$641.1 million.

The BCRD also highlighted the receipt of US$42.3 million in remittances through formal channels from other countries such as Spain in the month of January, which is 5.7% of the total, making it the second country in terms of total inhabitants. Dominican diaspora abroad, as well as Haiti and Italy, received 0.8% and 0.7% of inflows, respectively.

The remaining reception of remittances is isolated to countries such as Switzerland, Canada and Panama.

Regarding the distribution of remittances received by provinces, the BCRD indicated that during January the National District received a proportion of 36.7%, followed by the provinces of Santiago and Santo Domingo, which received 13.6% and 7.8%, respectively.

This shows that more than half (58.1%) of remittances are received in metropolitan areas of the country.

“Remittances are an important line of support for the families who receive them and have a direct impact on poverty and inequality reduction,” the supreme monetary authority said.

“Inflows received in January were mostly, 94.3%, destined for household spending, a figure consistent with earlier studies conducted by the Center for Latin American Monetary Studies (CEMLA). The rest was used to repay the loans of the recipient families,” he explained.

The BCRD also indicated that the most commonly used instrument as a means of payment for formal remittances received was cash, with a proportion of 93.2%. Debit cards were used to pay 5.4% of remittances and the remaining 1.4% was distributed between bank transfers and credit notes.

Approach

The BCRD’s outlook considers favorable growth of foreign exchange earnings through 2024, such as tourism earnings, foreign direct investment and exports, as well as remittances.

Regarding remittances and FDI inflows, it is estimated that at the end of the year they will be US$10.4 billion and US$4.5 billion respectively.

These foreign exchange flows favor the relative stability of the exchange rate currently observed, such that at the end of January 2024 the national currency depreciated by 1.2% compared to the end of 2023.

The institution highlighted that the greater inflow of external income has also made it possible to maintain an adequate level of international reserves, which reached US$14,371.3 million at the end of January. This level represents 11.7% of GDP and about 5.1 months of imports, above the limit recommended by the IMF.