The exchange rate accumulates a decline of 2.83% in 2023, but instead of widening the decline compared to a year ago, the year-on-year variation remained at 6.83%.
So far this year, the dollar accumulate a fall of 2.83%which adds to the decline of -10.35% that it registered in 2022. However, far from widening the gap with respect to the price of a year ago, the North American currency moderated its decline in recent weeks: it passed of 12.04% end of january at 6.83% at today’s value.
The interanual variation The exchange rate had been in double digits since November of last year and, at the beginning of February, it returned to a drop of a single number. Since then it has continued to decline and is now below 7 percentage points. To understand how this happened, it is important to look at the evolution of the current exchange rate, but also that of a year ago.
The explanation of why the interannual variation tends more and more to zero
The first explanation, more associated with common sense, is that the variation compared to a year ago is less and less as a result of the increase that the foreign currency is showing in February and March. Although it meant a slight rise, from the 38,681 pesos at the beginning of February to the current 38,935 pesosthere’s a 0.66% increase.
Although it remains at historically low levels for what is the management of Luis Lacalle Pouthe truth is that a year ago, coincidentally, the official price also fell to a great extent.
After touching the historical peak of 44,731 on January 5, 2022, the dollar began a downward trend. In February last year It pierced the floor of the 44 pesos. The plunge continued throughout the month and March began below the 43-peso threshold. Strictly speaking, in 42,553 pesos.
The collapse of the exchange rate did not stop there, during that month of last year, it continued to recede and shortly on March 25 –exactly one year ago– it stood at 41,478 pesos. Those same days are the ones that serve as the basis of comparison for these days of current March. Therefore, in addition to the recent rise, the gap compared to a year ago has been narrowing since, at the same time, the values at that time were falling.
The good news for the national government – in the face of the repeated claims of the different export sectors of Uruguay due to the significant depreciation that the dollar is experiencing in the country – is that, by the end of March and beginning of April of last year, the currency continued its setback and reached 40,126 pesos on the 21st of that month. If the exchange rate now continues its upward trend, the negative of the year-on-year variation will continue to get smaller and smaller.
Source: Ambito
