The Central Bank of the Dominican Republic (BCRD) estimates that the new electronic foreign exchange trading platform will begin to operate at the end of October, once banks make adjustments for the implementation of the scheme.
The exchange regulations have already been approved and the Monetary Board makes the adjustments prior to the formal publication of the regulations, in order to include the observations made by the bank, which is the sector most affected by the entry into force of the new mechanism.
BCRD spokespeople pointed out that banks have 90 days to accommodate the new conditions. The purchase-sale of foreign exchange will be different for banks, but not for customers, who will continue to go to a bank or exchange house as they have done regularly.
For multiple banks it will be mandatory to negotiate foreign exchange through this route and the authorities hope that the platform will be able to make the exchange market transparent.
The change proposed by the platform focuses on the fact that foreign exchange requests from buyers will be transmitted electronically from the bank through a system that connects directly with the CCRD, which will respond in real time if foreign exchange is available. One of the expected benefits is that banks no longer have caps to buy dollars, waiting lists or repeated requests from various banking institutions.
It should also monitor the level of intervention by the CCRD on the exchange market and exchange rate fixing. Currently, noted entrepreneurs, the exchange rate is around RD$52.15 per u.s. dollar for large purchases of foreign currency, and not RD$51.29, as they mark the banks publicly, which implies a difference of more than 80 cents, which affects the cost structure of the private sector.
Meanwhile, we continue to operate in parallel with multiple banks within the platform-that is, replicating operations within the platform’s environment prior to its entry into definitive production-, strengthening all negotiation functionalities,” the BCRD said. Multiple banks will be the first to enter the electronic platform and then, in stages, other participants will be added.
From the BCRD they pointed out that the exchange regulations will have some adjustments, but they did not explain what they are. Information was also requested from the Association of commercial banks of the Dominican Republic (ABA) on the comments submitted to the central bank on the regulation, but no information was received at the time of publication of this note.