He currency spread in Uruguay currently reaches the 6%, according to the blackboard Republic Bank (BROU)where the value of the dollar is at 37.75 pesos for the purchase and the one for sale to 40.15 pesos for sale.
In parallel, the same variable in Argentina, if the parallel price of the blue dollar is taken into account, is barely one 1%, between the 390 Argentine pesos of purchase and the 394 Argentine pesos selling.
What is the exchange spread and what does it mean that it is higher?
Banks and exchange houses participate in the exchange market precisely with the aim of obtaining an economic return.
Meanwhile, the currency spreadalso called exchange differentialis precisely the difference that these financial entities obtain between the value at which they sell and the value at which they buy a currency, where the former is always higher than the latter. Thus, it is neither more nor less than the gap that exists between the selling exchange rate and the buying exchange rate.
In the case of BROU, this difference is 2.40 pesos, which means a gap of 6 percentage points. While the 4 difference weights that exist in the case of Argentine parallel dollar represent just a 1% gapsince the values are much higher.
This means that currently the banks and exchange houses in Uruguay obtain a revenue of 6% in its exchange operations. Conversely, if a private saver hypothetically decided to sell his dollars and buy them back, he would lose the same proportion.
Along the same lines, said difference in Argentina is much lower –always speaking of the parallel market–.
How much should the dollar be?
According to the latest Survey of Market Expectations of the Central Bank of Uruguay (BCU), the exchange rate should now be at 39.28 pesos. Taking into account the value of the interbank price of the country’s highest financial institution, which this Tuesday closed at 39.24 pesos, the price of the dollar is in line with expectations.
According to the latest Big Mac index prepared by The Economist, Uruguay should have an exchange rate of 50 pesos, much higher than it is currently and even higher than the historical peaks registered at the beginning of 2022.
Source: Ambito
