For many years the Dominican peso stood at par with the U.S. dollar, but in 1985 it was devalued as part of an IMF-approved program to pull the country out of recession. Subsequently it was allowed to float against the dollar and has gradually lost much of its value. In 1990, US$1 was worth 11.20 pesos, but in early 2000, the dollar was worth 16.20 pesos. This rate means that imported goods from the United States have steadily become more expensive, including many staple items on which poor Dominicans depend. On the other hand, a cheap peso makes the Dominican Republic attractive both to foreign investors, who can pay even lower wages and to tourists whose dollars stretch further than elsewhere.
The country is currently experiencing relatively low levels of inflation, averaging less than 10 percent annually since the mid-1990s. This rate compares favorably with very high inflation rates in the early 1990s, which reached 54 percent in 1991 alone.