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Peruvian Bank anticipates Dollar price to settle between 3.24-3.27 Soles

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Peruvian BBVA Continental Bank anticipates that the US Dollar price will settle between 3.24 and 3.27 Nuevo Soles by the end of the year, implying that the Peruvian currency could be slightly devalued during the next months with respect to its current rate.

Giorgio Bernasconi, the bank’s manager responsible for international markets, explained that risk factors – for example the possibility that Peru’s Central Reserve Bank (BCR) raises its interest rate if international market dynamics and internal demands require such measure – could cause the Dollar’s value to rise slightly.

A possible raise of international interest rates and the petroleum price also play a contributing factor.

Nevertheless, Bernasconi said that “he would be more inclined to think the dollar would settle near 3.24 Soles by the end of 2006”, because in the short term, a revaluation of the dollar is not anticipated.

He referred that currently the exchange rate is very stable although, in the medium term, imports could rise due to demands for industrial machinery replacements. "But that will not happen in the short term”, he remarked.

Bernasconi also considered that if the BCR did not intervene in the currency exchange market, the dollar quotation would immediately plunge to 3.20 Soles or even lower.

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