MercoPress. South Atlantic News Agency

US dollar drops to July 2002 level in Uruguay markets

For the sixth week running the US dollar has depreciated againts the Uruguayan peso in the local Money market accumulation a loss of 9.98%. In the 26 weeks of 2008, the Uruguayan peso has increased during 19.

The current exchange rate of 19.40 Uruguayan pesos to the US dollar is the lowest since July 3 of 2002, a month before the financial crisis that under contagion from neighboring Argentina almost melted the Uruguayan economy. An emergency bridge loan from the President George Bush administration helped Uruguay overcome the situation. At the peak of the crisis 2002/03 the US dollar was selling in Uruguay above 30 pesos. The depreciation of the US dollar in Uruguay so far this year is equivalent to almost of 2007 in spite of significant purchases from the Uruguayan Central bank and other government financial institutions. Uruguayan sovereign bonds risk rate currently stands at 231 basic points which is equivalent to the surplus rate above US Treasury bonds demanded by purchasers. Local money market operators said that the excess of US dollars in late June could be attributed to the fact that this month the private sector must pay the additional half year compensation to its staff.