The sol continues to strengthen against the dollar. So far this year, it has accumulated a gain of 3.86%. In the session on Friday the 12th, it was placed at S/3.66, its lowest level of the year, according to the Central Reserve Bank of Peru (BCRP). To date, the trend towards strengthening our currency has been notorious. This after reaching levels close to S/4 per dollar in the third quarter of last year, but between October and December it was close to S/3.80. This trajectory has been accentuated during 2023, Well, it closed January at S/3.8470; February at S/3.7950; March at S/3.7640 and April at S/3.710. During May it has only yielded in two days, the 4th and the 8th.
This good performance makes the sol the most stable currency in the region, since daily fluctuations in the exchange rate —up and down— are less intense than their peers, says Mario Guerrero, Scotiabank’s head of Economic Studies. In the opinion of the specialist, the macroeconomic balances will continue to support the national currency. In this sense, he highlights that the trade balance accumulates a surplus of US$8.6 billion until February, higher than the US$7 billion of pre-pandemic; and the level of international reserves is close to US$75,000 million and is equivalent to 28% of GDP. To this he adds that the rise in international prices of metals such as copper and gold also drives the appreciation of the sol.
For his part, Adrián Armas, Central Manager of Economic Studies at the BCRP, points out that our currency has been the strongest in the region for the last 23 years. “The exchange rate depends on international variables, but the only thing that is true, and the market knows this, is that in this century, we are talking about the last 23 years, the sol has been the strongest currency in Latin America” he emphasizes.
In what corresponds to the last sessions, Javier Pineda, general manager of Billex, explains that the strength of the sun is associated with the weakening of the dollar globally. This as a consequence of the uncertainty generated by the approval of the extension of the debt ceiling of the US Government by Parliament. He adds that internal factors are added to this, such as the sale of dollars by companies for the next CTS payment, which generates a greater flow of currency in the market.
stable dollar this year
The exchange rate for the end of this year would be S/3.85 per dollar with a downward bias. This taking into account the positive performance of the sun in the last two years, predicts Mario Guerrero from Scotiabank. For his part, Esteban Tamayo, Citi’s economist for Colombia and Peru, estimates an exchange rate close to S/3.75. “Without the political noise, you shouldn’t expect a strong fluctuation. Going forward we expect an appreciation of the sol as the dollar falls against a broader basket of currencies”, he mentions.
Meanwhile, Javier Pineda projects a dollar around S/3.80 until the end of the year. He explains that this result would be reached because inflation in the US has not yet been controlled, which leads the Fed to raise its interest rates; while the BCRP would have already reached its limit and would not continue raising the reference rate.
The data
Next year. What is expected for 2024 is that the exchange rate will move more based on markets and fundamentals than on internal political turbulence; however, major events could affect it, says Mario Guerrero.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
