The exchange rate accumulates a decline of 2.79% in 2023, but instead of widening the decline compared to a year ago, the year-on-year variation was 2.81x%.
So far this year, the dollar accumulate a fall of 2.79%which is added to the 10.35% drop 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 months: it passed of 12.04% end of january at 2.81% 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 3 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 now so far in April. Although it meant a slight rise, from the 38,681 pesos at the beginning of February to the current 38,995 pesosthere’s a 0.81% 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 collapse continued throughout the month and March began below the threshold of 43 pesos. Strictly speaking, in 42,553 pesos. But also, it ended that month at 41,115 pesos.
The collapse of the exchange rate did not stop there, during April of last year it continued to recede and on April 21 –exactly one year ago compared to the close of this Friday– it was in 40,126 pesos. Those same days are the ones that serve as the basis of comparison for these days of current April. Therefore, the gap with respect 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 the dollar continued its decline in subsequent months.
Meanwhile, if the exchange rate is now on an upward trend, the negative of the year-on-year variation will continue to get smaller and smaller. Even if it remains at these levels –and does not rise–, the year-on-year will drop by itself to less than 1% in early June.
Source: Ambito
