During the past week the exchange rate registered increases and yesterday, according to the Central Reserve Bank (BCR), closed the day at S/ 3,806, an advance of 0.95% compared to Friday’s close, when the green currency closed at S/ 3,770. And in the course of the morning it rose more than 1.2%, reaching a peak of S/ 3,820.
Mario Guerrero, deputy manager of Monetary Economy at Scotiabank, explained that the type exchange It had been falling more strongly for several weeks due to the record tax regularization that took place this year. However, he pointed out that this period has ended and since April 20 there has been a recovery in the price of dollar that became more visible last Friday, with a significant rise that continued yesterday.
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“Since Friday there has been a significant jump in all exchange rates in the region and today [ayer] the sol depreciated close to 1%, which, on a daily basis, is something unusual in the foreign exchange markets. This is a significant increase in the region as a whole”he pointed.
He assured that, although the effects of the war between Russia and Ukraine continue, the focus of the market has turned this weekend to China, where the stock market has had the sharpest drop since the start of the pandemic.
“Shanghai and Beijing, the two most important cities in China subjected to confinement due to an outbreak of Covid-19, have triggered a massive sale of assets in that country and we are entering a new phase, where the war takes a back seat and the concern of the financial markets put their focus on China, which is a benchmark for the emerging markets of Latin America and our main trading partner”I note.
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Darío Valdizán, director of Buy Side Research at Credicorp Capital, agreed with this analysis and added that the World Bank announced downward revisions to global economic growth. However, the Peruvian sol is the currency that has depreciated the least compared to others in the region, he acknowledged.
Marco Contreras, Head Research of Kallpa SAB, noted that the depreciation of local currencies has occurred globally and responds, mainly, to fears about further increases in the reference rate of the Federal Reserve (FED, for its acronym in English) and fears about the global economy. Thus, these factors make the investor move away from emerging market assets and seek refuge in the dollarcausing it to be appreciated, he said.
Plano local
Valdizán mentioned that, although the main impact on the dollar It has been on the international side, the political factor and the increase in internal social conflicts have meant that the country has not benefited to a greater extent from the boom in the prices of mining commodities, as a result of the accentuated prolongation of the war between Russia and Ukraine.
For his part, Guerrero pointed out that local factors and political noise have influenced issues that seemed to have been left in the background and that have returned to the political agenda, such as the consultation, via referendum, for a new Constitution announced again by the President Pedro Castillo.
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perspectives
Guerrero explained that the rise in the exchange rate since January 2020 -when it was at S/ 3.29 and reached its peak in September 2021 with S/ 4.14-, has been corrected with the downward movement that It was seen from mid-December touching the lowest point in early April, when it reached S / 3.63.
“All that corrective movement is over and we are entering a new phase that will go upwards, with a lesser possibility of seeing the exchange rate below S/ 3.70, it will fluctuate between S/ 3.73 and S/ 3.83 with a volatile scenario for May. We project that it will close the year at S/ 3.80″he pointed.
Also, he said that the BCR intervened yesterday in the market selling US$ 241 million at S/ 3,818 per dollar to stop the depreciation of the local currency and from now on this will be a constant, so we will see it more active selling directly Dollars.
For Contreras, the behavior of the price of dollar It will continue to be volatile in the following weeks and, if the domestic political panorama deteriorates, this could influence higher increases.
For its part, from Kallpa SAB they estimate that the exchange rate will close the year at around S/ 3.90, due to the influence of external factors, especially the rise in the rate of the FED.
“The rise in interest FED is the main factor that will move the dollar globally and will cause greater demand for the US currency in the world. This, naturally, will affect the local exchange rate”said.
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BVL
The Lima Stock Exchange (BVL) closed the first week of the day with a drop of 4.36% and with all its indices in red.
In this regard, Guerrero stated that the indices of the stock market had been registering a recovery of 66%, from its floor in August 2021 to reaching its highest level on March 24, being one of the leading markets in the region.
“What we see is a correction since since that date it had been falling slightly and today [ayer] the movement has been more abrupt due to the fall in the price of gold and copper, as well as the concern about China that, to the extent that the uncertainty increases, we will see this negative behavior in our markets”I note.
In addition, he pointed out that the reason that the price of gold has fallen is that the strengthening of the dollar it has taken more weight over the inflation factor, which is hitting the price of metals.
“The strengthening of the dollar because the currencies that are compared against it, both European and Asian, are losing value”Guerrero asserted.