Persistence of social conflicts will raise the exchange rate

the exchange rate has been recording an upward trend as a consequence of the social conflicts that have been generating great concern in the economic development of the country. According to figures presented by the Ministry of Economy and Finance (MEF), between December 8, 2022 and January 23 of this year, the economic effects of these discrepancies had an impact of more than S/2,000 million.

In this sense, the price of the dollar is affected in the face of a panorama of instability and uncertainty, a product of the chaos and disorder that has arisen in recent weeks, which, according to Javier Pineda, general manager of Billex, If these conflicts persist, the sun will continue to weaken and the exchange rate will go up.

“At the beginning of January we had a dollar close to S/3.75 and since the start of the social conflicts it has maintained an upward trend, even reaching levels of S/3.90. Which explains that this depreciation of the sun is related to the social conflict, uncertainty and chaos that unfortunately have been taking place in the provinces and in the capital itself. In fact, if these social conflicts had not occurred, the exchange rate would have maintained a downward trend, most likely trading below S/3.70”Pineda said.

Likewise, Pineda refers that, if this situation is not controlled, the sol would continue to lose value against the dollar, and could even accelerate with a scenario such as the resignation of President Boluarte, since the market could consider an acceleration of the crisis and could raise the dollar to levels above S/3.90.

“A exchange rate that it continues to rise could also affect indicators such as inflation in the country, which should also push the authorities to think of a quick solution that should initially come from Congress’s approval of an orderly advance of elections”, concludes Pineda.