Dollar Plummets in Paraguay, Worrying Exchange Houses

In Paraguay, the sharp decline of the US dollar against the national currency, the guaraní, has become a significant economic talking point, as reported by ABC Color. The dollar's value has plummeted by 22%, hitting lows not observed in nearly a decade. This dramatic appreciation of the guaraní has sent ripples of concern through the country's exchange houses, which are now grappling with the financial implications.

Gregorio Mayor, the executive president of the Association of Exchange Houses of Paraguay (Accpy), has voiced his apprehension, describing the situation as a "technical and financial concern." The core issue for these businesses lies in asset valuation. As Mayor explained, while they hold the same quantity of dollars, their value in guaraníes has diminished significantly, projecting a "very significant" drop in profitability by year's end. This reversal is particularly striking, given the dollar's upward trend through 2024 and into early 2025.

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Tenemos la misma cantidad de dólares, pero cuando eso se refleja en nuestro balance, son menos guaraníes

Mayor points to a confluence of factors driving this currency shift. Internally, Paraguay has experienced a substantial influx of foreign currency within a short period, coupled with extraordinary capital inflows from the sale of national currency bonds. Externally, the policies enacted by the Donald Trump administration in the United States are identified as a crucial element. Mayor suggests that a weaker dollar benefits US global competitiveness, a factor beyond Paraguay's monetary policy control. Despite the cheaper dollar theoretically benefiting consumers through lower prices on imported goods, the Accpy president lamented that these savings have yet to materialize for the general public. This situation highlights a complex interplay of global economic forces and local market dynamics, with the Paraguayan perspective emphasizing the vulnerability of its financial sector to external influences.

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A ellos les favorece un dólar bajo para competir en el mercado mundial