The US dollar fell again in the Paraguayan market at the start of trading on Monday, June 15, following the extended holiday weekend. The US currency was quoted at G. 6,120 in the spot market, down from G. 6,140 recorded at the close of the previous Thursday. In the interbank market, the downward trend also intensified, with an average rate of G. 6,098, according to data published by the Central Bank of Paraguay (BCP).
So far this year, the dollar has already lost 9% of its value against the guaraní, while the 12-month variation reaches 25%. The sharp decline has caused discomfort in several sectors of the economy, which are calling for more active intervention by the Central Bank to contain the sharp swings in the exchange rate.
The depreciation of the US currency directly affects exporters, who now receive fewer guaraníes when converting the value of their goods. The movement also reduces the competitiveness of domestic products compared to those in the region and impacts customs revenues, since the conversion of imports into local currency results in lower-than-expected tax collection, as DNIT, Paraguay's tax and customs authority, had already pointed out.
The BCP maintains a neutral stance on its exchange rate policy and attributes the dollar's decline to the global trend and the inflow of foreign currency driven by increased investment and exports. In a recent statement, the institution once again recommended that economic agents adopt hedging instruments, such as FX forwards, to mitigate the effects of volatility.