Economy / Paraguay
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PYG: Inflation Still The Key
June 2006 | Currency ForecastSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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The guarani has been the best-performing Latin American currency against the dollar this year, having surpassed even our most bullish expectations. With the PYG having appreciated by 9.4% this year, the central bank is under pressure from the export sector to intervene to weaken the currency. This is easier said than done, as the central bank acknowledges that dollar purchases increase domestic liquidity and exacerbate existing inflationary problems. In any case, with the soy export season winding down, dollar inflows may begin to dry up, and this should leave the guarani trading with a softer tone for the rest of