The Executive Branch promulgated last Thursday, April 18, the law that authorizes, in an extraordinary and optional manner, AFP members to withdraw up to 4 Tax Tax Units (UIT) from their funds accumulated in their individual capitalization accounts. After the officialization of this rule, various citizens have been reporting a drop in the profitability of their savings.
Furthermore, its possible impacts on the capital market are generating concern among economic agents because short-term benefits are prioritized over future planning. While this is happening, the dollar exchange rate closed lower this Monday, April 29 and this shows a certain level of volatility that the North American currency has presented, according to the specialists consulted by La República.
AFP withdrawal 2024: what will be the impact of this measure on the dollar price?
For Arturo García, professor of Finance at ESAN Graduate School of Business, the withdrawal of the AFPs has increased the risk of affecting retirees’ pension funds and will cause these administrators to sell their financial assets abroad, which are in dollars. , to be able to make these disbursements in soles.
“By having to sell financial assets to be able to pay these withdrawals, the AFPs have to sell their positions and that causes the prices of their assets to drop and profitability is also affected. Definitely, this decision by Congress impacts economic stability and this is one of the reasons why Standard & Poor’s has lowered Peru’s credit rating, causing effects on the cost of financing and the exchange rate,” García explains.
Likewise, he maintains that the decrease in the reference rate by the Central Reserve Bank, which is now at 6%, would cause the price of the dollar to rise, but this would be mitigated by the sale of dollars that the four Pension Fund Administrators to honor retirement obligations.
“The price of the dollar, due to the sale that the AFP will make to pay for the withdrawals, will have a slight drop. Now, it will remain stable, or even trend upward, due to the issue of the greater country risk that we now represent. But, When the withdrawals are made for the sale of dollars, it will go down slightly and then it will rise again due to the purchase of dollars also made by those who withdrew,” he noted.
For his part, economist Omar Azañedo states that the next disbursement of up to 4 UIT from private pension funds will not have a significant impact on the dollar pricesince the financial market is very volatile and the AFPs must have planned the liquidation of their portfolios to meet payments.
“The AFPs themselves must have already anticipated that they will have to liquidate some of their funds in dollars and will begin to look at whether they do it outside or if they do it inside. So I don’t think this will have much impact on the price of the dollar. Let us not forget that we are in a context of global economic crisis and, despite that, the news this year is the volatility of the exchange rate.”sustains.
What is the dollar exchange rate trend for 2024?
The dollar exchange rate closed lower on April 29, standing at S/3,734, according to official figures from the Central Reserve Bank of Peru (BCRP). For specialists consulted by The Republicthe trend of the US currency will be upward until the end of this year.
“We are going to continue with a high and rising exchange rate. That means that we will have a dollar that is actually very close to S/3.70, to S/3.80. Furthermore, it is expected that in the second semester, as we have seen in 2022 and 2023, the exchange rate may be around S/3.8 or S/3.9, which will actually decline. To this we must add that the Fed does not announce a decline in interest rates. So, the American market continues to be attractive,” explains economist Azañedo.
Finally, teacher Arturo García states that various internal and external events have diminished the credit reputation of our country and that will cause damage to private investment, formal employment, tax revenues and the price of the dollar.
“Given these AFP withdrawal measures and a possible CTS disbursement that have had an immediate effect on the risk rating issue, “It will cause the dollar to be between S/3.72 and S/3.75 at the end of the year.”he sentenced.
Source: Larepublica
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