The exchange rate in Peru should remain with low volatility, although there is expectations regarding the current electoral situation in the country and, above all, the uncertainty generated by the armed conflict in the Middle East, despite the two-week truce given by U.S. President Donald Trump.
This was stated by ESAN University Professor Edmundo Lizarzaburu in an interview with Andina News Agency.
"In theory, until before this situation involving the conflict in Iran, a weakness of the dollar had been observed due to issues in U.S. domestic economy, but now it is somehow reversing, although not to the levels of two or three months ago," Lizarzaburu said.
"In particular, the exchange rate that we have today in Peru is, in some way, at somewhat expectant levels. Let us remember that we are also going through an electoral process," he added.
The professor indicated that some analysts consider that the elections might not affect the exchange rate, but that would be relative because expectations are generated.
"I believe it always affects because the exchange rate ends up being negotiated on the basis of expectations and perceptions, and that ultimately results in an increase or a decrease of the dollar," Lizarzaburu explained.
"Analyzing somewhat the indicators that are observed, the issues of the economy and unemployment in the United States, as well as the global situation, the exchange rate in Peru should remain with low volatility, always expecting that complicated situations do not arise in international markets," he added.
The ESAN professor highlighted that 85% of international trade is conducted in U.S. dollars; thus, other currencies, such as the euro or the yuan, have low participation.
"I believe the euro does not have the representativeness that was expected 25 years ago and could remain at levels similar to the current ones, perhaps with a slight downward trend because let us remember that it represents 20 economies," Lizarzaburu stated.
"One must understand that currencies are not only determined by reserves, but it is also considered how each country manages its monetary policy, benchmark interest rate, and internal issues," he said.
Lizarzaburu emphasized that the two-week truce granted by the U.S. government in the war with Iran is good news, not only for economic and financial issues, but also for the humanitarian aspect.
"The relevance of this conflict is mainly focused on oil and how this product reached a value of US$115 per barrel, when it was approximately at US$75 at the end of February, but now it has fallen to levels between US$95 and US$96," he indicated.
"There is an important signal, this reduction in the value of crude oil should generate a positive impact on the markets, considering that any conflict generates a distortion, and that is what has been happening," the ESAN professor stated.
"Markets today have opened lower. This situation caused them to rise yesterday, there was a lot of excitement, but as the days pass, what the market needs is information and concrete actions. Therefore, there is real uncertainty," he added.