Dollar closes April at S/3,710, its lowest level since June 2022

The dollar closed April at S/3.71, its lowest level in the last 10 months. It reached this same value on June 3 of last year. Thus, it completed more than 10 consecutive downward sessions and accumulated a decline of -2.55% so far in 2023. Only in the fourth month it fell -1.59% against the sun, according to the Central Reserve Bank of Peru (BCRP). During the day, US$320 million were traded at an average price of S/3.7111. In addition, there were securities repo maturities for S/1,000 million.

Fall factors

The fall of the US currency in recent sessions is driven by market expectations that it perceives both in the local and international scenario that factors such as inflation are beginning to be controlled, comments Enrique Díaz, president of MC&F Consultores. The economist cites that in the US, although there are still ambivalent indicators, there are signs that the economy is recovering and that the possibility of a recession is becoming more distant.

For his part, Javier Gamboa, manager of Financial Insurance and Pensions at RIMAC, indicates that the weakening of the dollar is related to the copper price recovery which has brought a lot of appreciation for metal-dependent currencies such as the Peruvian case. Meanwhile, Ana Lucía Rondón, Investment Associate at Prima AFP, warns that the drop in the dollar is due to the fact that the US Federal Reserve has slowed down the rate of rise in the reference interest rate and is possibly close to reversing this curve.

Regarding the local sphere, Díaz indicates that the sun has been favored by the apparent socio-political stability of the last few weeks. In addition to this, a better management of the economy from the Executive. “They give a feeling of relative stability despite the fact that we don’t have significant growth,” he says.

Effects on the market

It is very difficult for the fall of the dollar to be reflected in the prices of goods or services to consumers immediately, Díaz explains. “Soon it does little or nothing. What you have to look at is the trend”he comments and adds that this has remained without much variation in recent months.