September is on track to record the largest monthly increase in more than six months. The claim for misalignment continues.
He dollar in Uruguay continue with your positive trend in September amid criticism from the exchange delay which continues to be a problem for the economy, and hopes to achieve a monthly increase that begins to reduce the misalignment of the exchange rate.
With its second consecutive rise – after two days of decline – the dollar continues well positioned in positive ground in September, and is on track to have the largest monthly increase since February, after some resoundingly negative months, such as June and July. Yesterday, the price closed at 38.13 pesos—it had a slight increase of 0.01%—according to official data from the Central Bank of Uruguay (BCU).
With this behavior – which alternates rising and falling days – the US currency accumulates a appreciation of 1.43% so far this month, with 8 exchange days left until the end of September. In any case, and despite this good relative increase, the exchange rate fails to reverse this year’s trend and the accumulated decline of 4.84% during 2023 —which reaches a drop of 7% if the year-on-year comparison is considered.
The exchange rate delay, a current concern
Despite what has been a good month for the exchange rate – at least, in relation to the immediately previous months – and the fact that the currency seems established in the 38 peso rangefrom the export sectors continue their criticism of the government’s monetary management, pointing out a exchange delay that remain in the order of the fifteen% and that, clearly, affects the competitiveness from the country.
Such was the case of the president of the Rural Association of Uruguay (ARU), Patricio Cortabarría, who used his closing speech Expo Prado 2023 to insist, once again, on the sector’s claims towards the president Luis Lacalle Pou —who, days before, admitted to the rural union the government’s lack of tools to correct the exchange rate misalignment.
The same former president Julio María Sanguinetti He maintained that the current government prioritized inflation over the exchange rate delay. In fact, according to the economist and director of the Center for Studies of Economic and Social Reality (Ceres), Ignacio Munyoinflation figures could not remain within the target range if the dollar will begin to appreciate above 38.50 pesos.
This generates different possible scenarios in the medium term: on the one hand, that the dollar —driven by a more favorable global context of strengthening of the US currency and investor confidence, as well as the new declines expected for the Monetary Policy Rate (MPR) at the local level—consolidates its upward trend and settles back into the range of 39 pesos, in values closer to market expectations for the end of the year, at the expense of placing the inflation rate within the target range; or that he dollar has a ceiling installed on current values - supported, even, by the government itself -, continuing with policies focused on the inflation controldespite the claims of the exporting sectors.
Source: Ambito
