JPMorgan recommends Dominican peso assets amid strong performance

JPMorgan has recommended investors gain exposure to Dominican assets, particularly sovereign bonds maturing in 2033, due to the Dominican peso's status as one of Latin America's best-performing currencies in 2026. The peso has appreciated by 7.6% this year, defying international headwinds such as higher energy prices and the Dominican Republic's reliance on oil imports.

The financial institution attributes the peso's strength to a diversified foreign currency generation structure, primarily supported by robust exports, a thriving tourism sector, significant remittance inflows, and strong foreign direct investment. This assessment aligns with data from the Central Bank of the Dominican Republic (BCRD), which reported an approximate 8% appreciation of the peso by the end of July 2026, linking it to increased foreign currency inflows.

A key factor highlighted by JPMorgan is the reduction in the current account deficit, which fell to 0.7% of GDP in the four quarters ending March, its lowest point since 2017-2018. The bank forecasts the deficit to close 2026 at around 0.9% of GDP, supported by a stable trade balance and sustained high revenues from tourism and remittances.

Specific drivers include a 23.5% year-on-year increase in gold export values. Tourism also shows strong growth, with international visitor arrivals up about 10% and tourism revenue reaching $6.716 billion in the first half of 2026, a 15.3% increase. Remittances contributed $7.316 billion between January and July, up 6.4% from the same period in 2025. Combined, these inflows generated over $26.5 billion in foreign currency during the first semester, an increase of $2.8 billion compared to the previous year, helping to offset higher oil import costs.