Dollar falls again at start of week as guaraní strengthens

The dollar began the week with another fall against Paraguay’s guaraní, reaching G. 5,950 in the cash-exchange market, 20 points below Friday’s close of G. 5,970.

The decline also appeared in the interbank market, where the exchange rate stood at G. 5,921. The gap between the two rates reflects the usual difference between retail exchange operations and transactions among banks, while the guaraní continues to strengthen.

The dollar reached the same G. 5,950 level two weeks ago, briefly rose by several points and then returned to that floor at the start of Monday’s trading. Over the past 12 months, it has fallen about 20% against the guaraní. A year ago, it traded at around G. 7,400, a difference of roughly G. 1,450 per dollar.

The movement is reshaping relative prices and foreign-trade decisions. A stronger guaraní can reduce import costs, but it can also lower the local-currency value of dollar-denominated income, especially export earnings.

Recent results from the Economic Variables Survey show that market participants have lowered their dollar forecasts. Expectations now place the exchange rate at about G. 6,000 this month and close to G. 6,150 at the end of the year, down from the previous estimate of G. 6,300.