Today, the Peruvian Sol fell to its lowest level in nearly 6 years despite Central Bank Intervention.
Via El Comercio (Bing Translator)
Exchange rate soared to S/.3,085 despite intervention of BCR
The exchange rate today continued its bullish run and scored a new peak in nearly six years, a day in which the Central Reserve Bank (BCR) intervened in the market to counteract the strong demand for currencies of foreign investors and companies, faced with the global advance of the dollar.
At the end of the session, the exchange rate scored an advance of 0.55% and closed to S/.3,085 in the interbank market, its highest level since the S/.3,088 registered on April 22, 2009. Yesterday, the greenback closed at S/.3, 068.
“The Central Bank intervened with currency swaps, but given the avalanche of purchases of dollars from corporate […] (the central bank) used reserves of $ 200 million nearly a figure above than anticipated”, an operator told Reuters.
With the result of the day, the exchange rate accumulated a gain of 3.52 percentage points in the local currency exchanges so far this year.
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This continued fall of the Peruvian currency will put additional strains on the Peruvian balance of trade, and on top of falling commodity prices will continue the downward spiral in a self reinforcing slowdown.
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