Projected Increase of the US Dollar in Paraguay Amid Market Pressures

The US dollar is rising in Paraguay, forecasted to reach ₲ 8,000 by mid-2025 due to international issues and falling soybean prices, despite Central Bank interventions. Experts like Emil Mendoza and Miguel Mora point to global conflicts as key drivers, noting minimal impact from local trade with Bolivia.

The US dollar continues to appreciate in Paraguay, despite the Central Bank of Paraguay (BCP) intervening by selling US$ 216 million to local financial institutions in an attempt to stabilize the currency. Experts forecast that the dollar could reach ₲ 8,000 by the first half of 2025, influenced by international tensions and a decline in soybean market prices.

Emil Mendoza from the Association of Exchange Houses emphasizes the significant impact of global conflicts and poor soybean prices, which adversely affect dollar-tied products. “This is something atypical that occurs because of the international war that is damaging our market, causing the dollar to rise,” Mendoza stated in a radio interview.

Regarding soybean production, Mendoza observed, “Our soybean production was not as expected; the external factor would be that soybean does not have a good price at the international level due to international tensions between the United States, the European Union, China, and India.”

BCP board member Miguel Mora refuted allegations suggesting that dollar leakage to Bolivia is a predominant cause of the dollar’s rise, explaining that minimal trade between Paraguay and Bolivia is conducted through formal channels. He articulated, “We do not have significant trade with Bolivia for this to be a determining factor in the exchange market.”

Mora highlighted that informal cash transactions account for only 5% of trade, which he deemed insufficient to exert considerable pressure on the dollar. He concurred with Mendoza that falling commodity prices, particularly for soybeans and corn, along with global trade uncertainties, are significant contributors to the dollar’s appreciation.

He further noted that while an increase in export revenues might alleviate pressure on the currency later this year, the upward trajectory of the dollar is expected to continue for the foreseeable future.

The ongoing rise of the US dollar in Paraguay is driven primarily by international conflicts and declining soybean prices. Despite interventions by the Central Bank, experts foresee a continued increase, potentially reaching ₲ 8,000. The perspectives offered by Emil Mendoza and Miguel Mora emphasize the critical impact of global market dynamics rather than local trade issues as the cause of this trend.

Original Source: en.mercopress.com