Since the beginning of March, the exchange rate has shown a successive decline to below 3.70 soles per dollar, after reaching an extreme peak of 3.88 soles per dollar in February.
This Monday, March 18th The exchange rate stands at 3.68 solesAccording to information from Central Reserve Bank (BCR). In this regard, Jorge Carrillo, a professor at Pacifico Business School, indicates that the American currency may continue to decline in the coming weeks until it reaches the level of… Maximum 3.65 soles.
What factors are driving this downward trend?
In statements by L Andean AgencyCarrillo explained The result is mainly due to two factorsMonetary policy in Peru and the United States, and the payment of taxes and benefits by corporations to their workers.
He pointed out that “March is the month in which many export companies, from mining to agro-industrial companies, go out to sell dollars because they have to pay income tax and profits to their workers.”
“These payments are usually in sole, but businessmen earn in dollars; “Therefore, there is a lot of supply of dollars, which causes the exchange rate to fall,” he added. The financial expert also noted that expectations have been created on the part of investors regarding the reference rates of BCR and United States Federal Reserve (FED).
Read also: Peru's economy recovers with 1.37% growth in January: What sectors emerged?
He explained, “The closer the two prices are, the more investors think that the dollar is preferable to the sun or that they prefer to invest abroad, and therefore there will be a greater demand for the dollar if it rises.”
After the stop he specified PCR Regarding the reduction in the reference interest rate, expectations that the exchange rate will continue to appreciate have decreased. “In March and April, due to the situation, the dollar tends to fall. He added: “I think the exchange rate will remain the same or decrease slightly, unless there is external news that changes expectations.”
Save in soles or dollars?
Given the current context, the teacher made two main recommendations for those who still have doubts about which currency to save in:
1. If your salary is in pennies and you spend in pennies, it is better to continue using the national currency.
2. If you are looking to increase your savings through financial instruments, keep in mind that the interest rate on savings in slippers is double or more than what is paid in dollars.
In fact, according to information from the Banking and Insurance Supervision Authority and Agence France-Presse (SBS), the interest rate on fixed-term deposits for 360 days is 4.37% in Sol for individuals, while in dollars it is 2.47%.
“We shouldn't speculate. One should buy dollars as much as they need, not because they think they will earn or generate any profitability.. “It is a very unstable currency, so you would be playing the lottery if you were buying dollars to get some profits.”
Getting into debt in soles or dollars?
Likewise, a Pacifico Business School professor recommends holding debt in the currency you receive from your paycheck.
He pointed out, “One must borrow in the currency in which one receives his salary, otherwise he will depend on the exchange rate, which can harm you as in February when it was rising or benefit as now when it is falling.”
Read also: Peruvian economy will rebound in 2024 with growth of 2.7%, according to BBVA Research
