The US dollar reached a new high against the peso today, with the market closing at 20.61 pesos to the greenback.

A day after the Central Bank sold US $30 million in the foreign exchange market to absorb some of the demand for greenbacks, the peso lost nine cents against the dollar to reach a new nominal high. At the same time, the Euro also reached a new high – finishing the day at 25.90 pesos.

In contrast to yesterday, the Central Bank did not sell dollars on the foreign exchange market. Reserves declined slightly to US $61.706 billion yesterday after the Central Bank took action for the first time since August 2017.

Since the start of the year the dollar, then worth 18.74 pesos, has appreciated by 10 percent in nominal terms against the peso. While the inflation figures for February have not been finalized yet, inflation over the January-February  period will certainly be under 10 percent. At the end of 2017 the peso gained heavily against the peso, with some analysts considering that the market was adjusting the exchange rate to keep it inline with inflation.

“Without the tutelage of the Central Bank in the operations, the prices for the dollar looked for a new equilibrium point” wrote Gustavo Quintana of PR Cambios.

In conversation with Télam, Fernando Izzo, an analyst with ABC Mercado de Cambios, said that “today’s increase demonstrates that banks, businesses and investors have not satisfied their needs in terms of dollar coverage.”