Brace Yourselves: US Dollar Reaches New High Against Peso

Greenbacks fetching up to AR $19.65 in banks in the financial district.

The dollar has strengthened against the peso in recent weeks.

The US dollar has reached a fresh record high against the peso, with greenbacks fetching up to AR $19.65 in banks in the financial district.

The record hit today comes after three days of a weakening peso and 19 cent slide for the peso, which is close to a one percent loss in a single day. So far in 2018 the dollar has gained 3.6 percent against the peso, breaking the record hit in December 2017 of AR $19.46 to the dollar and continuing the trend seen at the end of last year.

Hints yesterday by Central Bank governor Federico Sturzenegger that a gradual reduction of interest rates is on the cards, further to the rate cut that took place at the beginning of the month, have boosted demand for the dollar. Another the rate cut could take place today, sparking market movement.

The Central Bank cut its benchmark interest rate on January 9 by 0.75 percentage points, less than what the market had anticipated, thus reaching an even 28 percent. The rate applicable to seven-day loans between banks and the Central Bank had previously been at 28.75 percent and some estimates had envisioned a reduction of up to 26.75 percent (two full points).