The sharp drop of the dollar in April and the maintenance of the reduced level in the first half of May set off an alert among Paraguayan exporters. Sectors such as fruit and vegetables and maquiladora industries are among the hardest hit, as they have costs in guaranis and bill in dollars, which squeezes profit margins.
Industry and Trade Minister Marco Riquelme said the situation is critical. “It is having a big impact, especially on export industries, which have their costs in guaranis and bill in dollars. Revenue falls, but local costs do not go down,” he said in an interview on radio 1020 AM.
According to Riquelme, exporters are trying to negotiate higher prices abroad to offset the exchange rate loss. However, he acknowledged the difficulty: “Many are trying to negotiate the cost of the product to raise prices abroad, but that is complicated, because export contracts usually close volumes and prices for a whole year.”
The dollar exchange rate started April at around G. 6,500 and ended the month near G. 6,000, a level that held until mid-May. Exporters have already expressed dissatisfaction and demanded measures from the Central Bank of Paraguay (BCP). The institution, for its part, reiterated that it will not intervene in the foreign exchange market, attributing the downward trend to external factors, such as US policy, and internal ones, such as the inflow of dollars from exports at the beginning of the year.
The Association of Small and Medium Construction Companies (Appec) also warned about the direct impacts of the exchange rate on the productive sector, reinforcing the widespread concern among economic agents.