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What will happen to the dollar in 2019?

In early October The Central Bank of the Republic of Argentina (BCRA) established a "non-intervention zone", which saves dollars for sales segments of which $ 34 and $ 44 peso, and are adjusted every day at a rate of 3% per month.

For the year that starts the non-intervention zone boundaries will be updated daily with a monthly rate of 2%, starting at 37,117 and 48,034 pesos per dollar, with daily updates of up to 2% per month. If you follow the same path this year, you can expect the currency to remain at the center of those values.

This means that if the peso depreciates such that the exchange rate is above the upper limit of the non-intervention zone, BCRA can sell dollars through tenders of up to US $ 150 million per day.

In this way, the Central Bank will withdraw the peso it earns for the dollar, strengthening the contraction of the monetary base when it is most needed: before a sharp decline in demand for money.

Conversely, before a quick nominal appreciation, it will allow BCRA to buy foreign currency through offers of up to US $ 150 million per day. The monetary base can only grow if there are clear signs of trust in the peso.

BCRA Priority

In accordance with the objectives set by the monetary authority, "promoting financial sector stability and development" is a priority. Within this framework, they will continue to "promote savings instruments in national currencies", and will continue the path of facilitating access to banking operations in various types of businesses.

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