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What will happen to the dollar in 2019?

Early October Central Bank of the Argentine Republic (BCRA) created a “zone of non-intervention”which held the dollar for the sales segment between $ 34 and $ 44 pesos, and is adjusted daily at a rate of 3% per month.

During the year that begins, the limits of the non-interference zone will be updated daily at a monthly rate of 2%, starting at 37,117 and 48,034 pesos per dollar, with daily updates up to 2% per month. If you follow the same path as this year, you can expect the currency to remain at the center of these values.

This means that if the peso is depreciated in such a way that the exchange rate exceeds the upper limit of the zone of non-intervention, the BCRA can sell dollars through tenders for up to $ 150 million per day.

Thus, the Central Bank will withdraw the peso it receives for dollars, reinforcing the reduction in the monetary base when it is most needed: until a noticeable decrease in the demand for money.

On the contrary, prior to rapid nominal strengthening, this will allow the BCRA to buy foreign currency on requests of up to $ 150 million per day. The monetary base can only grow if there are clear signs of confidence in the peso.

BCRA Priorities

In accordance with the objectives set by the monetary authority, “promoting stability and development of the financial sector” is a priority. In this context, they will continue to “promote savings instruments in national currency” and will continue along the path of facilitating access to banking operations in various types of business.

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