Saturday, January 28, 2023

The Nation / No Break! Dollar continues to break barriers and reaches G. 7,430

The dollar continues with its global strengthening process and in Paraguay it continues to break barriers after reaching historic levels. Currently, it stands at G. 7,430 for each ticket in the retail market, the highest price it has reached in the last 12 months.

Amid seasonal context, the upward trend in the first week of the year keeps the greenback higher. Although the United States Federal Reserve (Fed) is seen increasing interest rates, it is expected to be at a slower rate, so less pressure on the exchange rate was expected.

However, in the third week of the first month of 2023, it again rose 10 points, and without stopping, reached G. 7,430, thus surpassing the proposed G. 7,400 barrier for January. In this sense, economist José Luis Rodríguez Tornaco agreed that the increase is explained by a greater outflow of foreign currency from the country due to lower exports last year.

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In this sense, he pointed out that US$1.3 billion more went out than entered in foreign trade, creating a dollar deficit that puts upward pressure on the exchange rate. Consider that this allowed the US currency to reach and exceed the G. 7,400 level during the past year and in this first month of 2023.

However, he added that this situation could start to reverse with an improvement in exports, noting that a good agricultural year is expected, which will stabilize the exchange rate. Facing upward pressures, the guarani depreciated by 6.8% against the dollar over the past year.

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The Central Bank of Paraguay (BCP), in response to these exorbitant increases, began with its intervention in the exchange market, injecting dollars into the financial system through daily sales. Although there was no movement in the first week of the year, it has been selling more dollars in the past days including today.

After its first intervention of US$3.5 million, the parent bank is already selling five more, thus taking its total to US$80.9 million. Despite this momentum, the exchange rate in the country continues to grow significantly, marking new historical peaks.

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Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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