Why is the dollar falling ?: the reasons behind the fall of the greenback this December 27

The dollar fell at the end of operations on Monday, December 27, and was quoted at S / 3,974; according to information from the Central Reserve Bank of Peru (BCRP) granted at 1.30 pm In this way the exchange rate price It fell 0.71%, compared to the close of Friday, December 24 (S / 4.0025). For its part, Bloomberg reported that the Peruvian sol was the best performing currency within emerging markets (+ 0.78%). Also, this drop is the lowest since last October 26.

Experts consulted by La República assured that the decline in the dollar exchange rate is mainly due to external factors such as the low risk of Omicron variant that has generated the offer of Dollars of non-resident investors, in addition to local factors such as possible changes in the Cabinet, the calm of the market since the attempted vacancy, and the distraction of agents with respect to the green ticket in this last part of the year.

Hugo Perea, Chief Economist for Peru at BBVA Research, said that the fall in the exchange rate was due to the fact that external markets noticed a better sentiment regarding the new variant of COVID-19, which had an impact on the markets of the region.

“It seems that Ómicron does not generate complications in the global recovery. There is a relatively positive sentiment in the markets, which is why we saw that the riskier investment indicators in the Stock Market have reached historical levels. This has been reflected in the currencies of emerging economies such as Latin America ”, he assured in dialogue with this newspaper.

Along these lines, the expert affirmed that, during the day on Monday, “there was a lot of demand for soles due to seasonal factors, as well as the presence of supply of dollars by institutional investors and non-residents that has not offset this strong demand.”

It should be noted that the US currency has depreciated in our country since last December 22 (S / 4.0360). According to Javier Pineda, Manager of Billex, this is due “to the end of the year effect”, that is to say, an apparent calm in the market; in addition to the “frustrated vacancy attempt.”

“The dollar has an effect that moves a lot because of what may be happening in the real economy sector and in the news. Right now there is a certain calm, perhaps there is a year-end effect, but in January we will be attentive to what is happening in the economy and in politics in our country. Ómicron is a question mark ”, warned the executive.

Meanwhile, Arturo García, economist and professor at ESAN, attributed this decline in dollar to the elevation by the BCRP of the reference rate to 2.50%, as well as to “the approval by the Congress that all constitutional changes must first be approved by the Congress before going to a referendum. Also, possible changes in the Cabinet ”.

While Jorge Luis Ojeda, finance professor, states that “the distraction of people by the Christmas and New Year holidays led to stop thinking about the dollar.” Nor did he rule out the “possible sale of dollars by people who bought them at the time it began to rise to spend parties,” which caused the exchange rate to fall.