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Dollar in Peru: why would the exchange rate continue to rise?

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This Tuesday, September 27 exchange rate closed at S/ 3.9500, a value that had not been registered since July 13 when it was located at S/ 3.9550, according to the report of the Central Reserve Bank (BCRP).

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In the parallel market, the US currency was trading at S/ 3.9300 for purchase and S/ 3.9600 for sale. Meanwhile, in the banking market was bought at S/ 3,869 and sold at S/ 4,049 at the windows of the Credit Bank of Peru (BCP).

This would be the third consecutive session in which the dollar advances, which places it with an accumulated variation of -1.03% so far this year. The latest increase in interest rates by the US Federal Reserve (Fed) is the main factor driving this trendaccording to specialists consulted by The Republic.

According to Javier Pineda, CEO of the Billex platform, it is necessary to keep in mind that this trend is not recent, it has been in the last two months. The exchange rate It has been appreciating, influenced by external factors, such as monetary policies to combat high inflation, as is the case in the United States, whose accumulated rate in the year reaches 6.2%.

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The specialist recalls that the immediate effect of raising interest rates is that of a “cooling”, that is, the GDP of a country tends to decrease. And if this is replicated in several countries, as it is happening, it creates a feeling that a global recession could be generated.

If we add to this the effects of war in ukraine, all to the point that the dollar is seen as the best safe-haven asset. A greater demand for the US currency causes its price to rise, which is happening not only in Peru but in all the countries of the region.

“There is a feeling that there may be a global cooling of the economy, and the central banks in the world have increased their interest rates, starting with the Fed, which last week raised its rate by 0.75% and that affected the exchange rate rises,” says Pineda.

Exchange rate is projected to close 2022 on S / 3.90

Along these lines, Juan Carlos Odar points out that the sol is one of the currencies with the best behavior in Latin America and in the world, since it is one of the few appreciated compared to its level at the beginning of the year.

“If one looks at the Chilean peso and the Colombian peso, they have lost value, the sol and the real are among the few that have been appreciating in the region, although the Brazilian currency does have greater volatility, which is a notable feature of our currency,” explains Odar.

Both specialists agree that the exchange rate in Peru it will close the year above S/ 3.90, taking into account that the Fed is likely to raise its interest rate again in November.

Global performance of the dollar

Internationally, the dollar rose against the euro but lost ground against the British pound and Japan’s yen with all eyes on central banks and the impact on economic growth of their efforts to control inflation, it reported. Reuters.

Sterling, after rising more than 1% to $1.0837, was up 0.3% as it had fallen to a record low on Monday. The euro was down 0.20% against the dollar at $0.96, and the dollar was up 0.1% against the yen at $144.86. It didn’t help that the rates of wall street were also having a volatile session.

Source: Larepublica

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