The US currency closed yesterday at 38,968 pesos and continues to operate below the 39-peso range.
He Monetary Policy Committee (Copom)finally, decided to lower the reference interest rate in Uruguay, unlike what many expected him to do, driven by the example of the United States Federal Reserve (Fed) and the need to reach the inflation targets for 2024. In this way, it reduced the Monetary Policy Rate (MPR) by 25 basis points, so it went from 11.5% to 11.25%. How can this initiative affect the value of the dollar?
The decision of the Central Bank of Uruguay (BCU) It was carried out “after making a positive assessment of the gradual decline in inflation in the last six months and the expected consolidation of this trend in the coming months,” as reported by the agency. This was the main element that was taken into account to lower the rates —when at the regional level the trend was upwards and, at the local level, nothing more than a freezing of the TPM was expected—, a measure much demanded by the Uruguayan export sector.
In that sense, Francisco Echegoyén, financial advisor company analyst Gaston Bengochea, that he had anticipated in dialogue with scope.com that the BCU would locate the rates at 11.25%, commented that this decision restores “hope” that the dollar “will appreciate again if they continue with this rate cut.”
The beginning of the end of the exchange rate delay?
Although it will be necessary to analyze the behavior of the dollar in the coming months —as well as closely follow the future meetings of the Copom, as well as its decisions—, the expectation now is that a upward pressure on the exchange rate that pushes towards a certain exchange equilibrium.
The dollar rose 0.11% yesterday compared to Tuesday and closed at 38.968 pesos, according to the official price of the BCU; and, despite the rise, the interbank price continues to operate below the range of 39 pesosas it closed the month of March and was maintained throughout April —although it accumulates a rise of 0.83% this month.
However, this was before the drop in the TPM became known, so we will have to wait until today’s opening to see how the markets react. markets And if, after more than a month in the 38-peso range, the foreign currency manages to break through.
This is what producers and analysts expect, who agree that the BCU measure could mean “a small advance” for exports and to achieve a more competitive economy abroad in a context in which the dollar accumulates a fall of 2.75% so far this year and whose closing expectations for 2023 are located at 41 pesos.
Likewise, for Echegoyen “this discourages agents from continuing to sell their dollars going through the exchange market and being placed in pesos” due to the drop in rates and profitability in local currency; therefore, the market, supposedly saturated with foreign currency due to the good year of exports, should begin to balance.
Source: Ambito
