MercoPress. South Atlantic News Agency

Dollar quotation projected to rise in Paraguay

The BCP sold US$ 216 million to the local financial market last week in an effort to contain volatility

The US dollar is continuing to rise in Paraguay despite the Central Bank (BCP) selling US$ 216 million to local financial institutions to stabilize the currency. Experts predict the dollar could reach ₲ 8,000 in the first half of 2025, driven by international tensions and a weak soybean market.

Emil Mendoza from the Association of Exchange Houses noted that global conflicts and poor soybean prices are key factors, impacting products tied to the dollar.

“This is something atypical that occurs because of the international war that is damaging our market, causing the dollar to rise”, said Mendoza in a radio interview.

“Our soybean production was not as expected, the external factor would be that soybean does not have a good price at international level due to international tensions between the United States, the European Union, China and India”, he also pointed out.

Meanwhile, BCP board member Miguel Mora dismissed claims that dollar leakage to Bolivia is a cause, stating that the neighboring country's minimal trade with Paraguay was handled through formal channels.

Unlike with Argentina, “we do not have significant trade with Bolivia for this to be a determining factor in the exchange market,” he stressed.

In addition, informal cash transactions represent only 5%, so they cannot generate significant pressure on the dollar, Mora argued.

He concurred with Mendoza that falling commodity prices (soybeans and corn) and global trade uncertainties were the main drivers for the US currency's rise, coupled with foreign elements, such as the trade war between world powers and the uncertainty about the US under President Donald Trump and his tariffs slapping sprees.

Mora also noted that while export revenues may ease the pressure later this year, the dollar's upward trend would persist for now.