The US dollar shied away from the 20-peso mark in trading today, losing ground against the peso after hitting a new record yesterday of 19.93 pesos.
Before the close of business today, the average exchange rate was hovering in the range of 19.71 pesos to the dollar. Since the last month of 2017 the dollar has gained more than 13 percent as the market has been responding to anticipated shifts in the central Bank’s benchmark interest rates.
The Central Bank cut rates by 75 basis points in early January and this week added another 75 basis point cut, leaving the rate at 27.25 percent. The move by the Central Bank is further to the adjustment of inflation targets announced after Christmas.
“Sales by public banks have pushed the dollar’s fall with the apparent intention of correcting the strong increase in the previous days said Gustavo Quintana of PR Casa de Cambios, as quoted by La Nación.
In keeping with the defense made by President Mauricio Macri of the current exchange system, Treasury Minister Nicolás Dujovne said today in Davos, Switzerland, “we have a floating exchange rate, sometimes it appreciates and others it depreciates. It’s absolutely natural, normal. Let’s get used to it. I’m convinced that it’s the right system for Argentina that isolates us from the shocks that generate increases in the unemployment rate.”