The Central Bank announced yesterday it would use its foreign reserves to restrain the devaluation of the peso. The peso has lost more than the usual value over the last few days, and there is concern for ripple negative effects on price stability.

The Central Bank attributed the devaluation to seasonal elements normal for the first third of the year, rather than to monetary reasons. Sources indicate that export free zones and other generators of foreign exchange had closed for the first week of the year. The Central Bank met with representatives of commercial banks yesterday and said that tourism and free zone hard currency sellers would be selling their dollar holdings in the coming weeks.

The Central Bank informed the commercial banks that the situation would be closely monitored to prevent unwanted movements in the exchange rate that could affect the development of the economy.

www.bancentral.gov.do/notas_del_bc.asp?a=bc2012-01-12

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