January 18, 2018
Friday, July 28, 2017

Volatile week for peso sees currency break records against the dollar

The Argentine peso has lost about five percent of its value against the US dollar so far in July
The Argentine peso has lost about five percent of its value against the US dollar so far in July
The Argentine peso has lost about five percent of its value against the US dollar so far in July

Economy Minister Dujovne insists once again that depreciation will not affect inflation

The Argentine peso faced another week of volatility against the US dollar this week, reaching a new record and fluctuating enough to once again prompt the government to make assurances that the dollar won’t affect key economic variables.

Yesterday banks were parting ways with US dollars for just under 18 pesos and traders closed at 17.53, close to the weekly high that was set on Monday. So far in July the peso has lost just over five percent of its value against the dollar, which has in the same period depreciated against other world currencies.

The week has seen the Banco Provincia played a significant role in ensuring that the dollar did not appreciate further against the peso as it sold foreign exchange on a significant basis twice this week. The Central Bank has insisted that it has floated the peso and does not intervene in the foreign exchange market, but some in the market have pointed to the Banco Provincia activity as evidence to the contrary.

Treasury Minister Nicolás Dujovne said “just as we were relaxed when it (the dollar) was around 15.20 pesos, now we’re also relaxed.” Dujovne also said once again that he perceived a decoupling between the exchange rate and the rate of inflation. The Central Bank has not played a significant role in the last week in the foreign exchange markets, suggesting that the government and Central Bank Governor Federico Sturzenegger are comfortable with the current situation.

The Puente brokerage firm noted yesterday that in light of the upcoming legislative elections, it would seem “adequate” to keep a significant proportion of portfolios in dollars, “particularly the short-term to medium-term bonds.”

In turn, analyst Gustavo Quintana of PR Corredores de Cambio said that the end of the month could also be responsible as demand for foreign exchange grows. “Without the support from the heavy public sales that took place in other days, the dollar gained ground in another day of trading that was also impacted by the upcoming end ot the month.” Quintana added that the dollar’s appreciation was taking place “without any panic, there isn’t a run, nor any flight. This is an adjustment in the prices of a good that was very under-priced.”

— Herald with Télam

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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia