Dollar today: stays below $ 37

November 1, 2018 - By Joseph Taylor

The price of the dollar remains low, after crossing the barrier of $ 37. While in the retail market the currency remained at the average of $ 36.98 that had closed on Wednesday, in the wholesaler (which is the which then serves as a guide for the retailer), the price of the dollar fell about 10 cents, to $ 35.81.

The dollar is approaching the floor of the band that the Government agreed with the Central Bank. That band, had started at $ 34 and $ 44. But, as it is updated 3% monthly on a daily basis, a month after the start of the agreement it has already risen to $ 35.02 and $ 45.32.

The drop in the currency is due to the entry of dollars from investors attracted by the high interest rates in pesos. The funds sell their dollars and place their pesos in Lecap or another instrument that allows you to get rates above 50%. As the dollar is falling, then with those pesos they buy the currency. It is the operation known as “carry trade”.

For economists, the other side of these high rates is a greater recession in the economy. However, until a clear drop in inflation is verified, the agreement with the IMF limits the reduction of the rate.

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