Today Digital – RD can benefit from yuan devaluation: BC International Department


The Dominican Republic could benefit from the devaluation that took place of the yuan, the Chinese currency, in the context of the trade war between the United States and the Asian country, states a document prepared by the International Department of the Central Bank.
According to the document published on the Open Page of the Central Bank's website, the Dominican Republic has specialized in export segments that allow better management of the risks of the devaluation of the yuan.
“On the one hand, Dominican free zones have enviable access to the American market because of the facilities offered by the DR-CAFTA trade agreement. At the same time, China is not a direct competitor to other important Dominican products and services, such as tourism, cocoa and organic bananas, "the document explains.
In addition, he points out that the fall in imports of Chinese products and stocks after the depreciation of the yuan can have an impact on the acceleration of local commercial and production activity.
“The Dominican Republic, due to the fact that they have a free trade agreement with the United States, could become an attractive point for both Chinese and American companies looking for competitive labor, with experience in production and in an environment of economic stability and legal certainty, to export their products to North America, "he explains.
However, the document claims that in this environment of uncertainty surrounding commercial tensions and global growth expectations, emerging economies face the challenge of taking advantage of investors' capital flows that are becoming increasingly selective.
In this context, economies such as the Dominican Republic have the task of continuing to stand out through the power of its macroeconomic fundamentals, a consistent history of credibility, as well as the performance of a private sector that offers valuable investment opportunities, "he says.
All of the above, in a climate of stability that continues to distinguish the Dominican economy as a safe economy in a convulsive international environment.
The trade war between China and the United States has not only had an impact on world trade, but has also created an environment of uncertainty that has led to a slowdown in economic activity in almost every economy in the world.
However, the Central Bank of the Dominican Republic has a significant number of monetary policy instruments, which will be detailed in a subsequent tranche, so that economic agents can be sure that the institution will continue to act in a prudent and timely manner according to changes in both internal and external context. And this to maintain the macroeconomic stability recognized by international organizations and which is the flagship for attracting large investments that promote the development of the nation.
In view of the above, the Dominican BCRD confirms its commitment to remain alert to international events.
BC policy
The Central Bank will remain alert to international events that could affect the sustainability of growth and reach the inflation target, and thus be able to act in a timely manner with the available monetary policy instruments.