Uruguay’s Dollar Decline: A Trend Resurfacing from 2016?
Uruguay is currently experiencing a sustained decline in the value of the dollar against the peso, a pattern not seen since 2016. While the government has taken steps to address this trend, the downward pressure continues, albeit at a slower pace than in neighboring countries like Argentina and Brazil.
February 2026: A Seventh Consecutive Monthly Drop
The Uruguayan dollar fell 0.25% in February, marking the seventh consecutive month of decline. This mirrors a similar period in 2016, though the current decrease is less pronounced than those observed in Brazil (-1.54%) and Argentina (-3.5%). Yesterday, the dollar closed at an average of $38.402, a 0.09% decrease in interbank transactions.
Year-to-Date Performance and Volatility
So far this year, the dollar has fallen 1.64%, and over the past 12 months, it has decreased by 9.28%. February saw a mixed performance, with the dollar rising on 10 days and falling on 8 out of 18 trading days. The largest daily increase was 0.55% on February 12th, while the most significant drop was 0.92% on February 23rd.
The highest value recorded in February was $38.841 on February 13th, and the lowest was $38.353 on February 23rd. The average dollar value for the month was $38.57, a 0.33% increase compared to January.
Trading Volume and Public Rates
February saw a total of 1,081 transactions on the Bolsa Electrónica de Valores (Bevsa), equivalent to US$575.1 million. This week alone, 284 transactions were completed for US$156.6 million, with yesterday’s trading volume reaching US$30 million across 49 transactions.
At Banco República, the dollar saw a 10-cent increase in the purchase rate and remained stable in the selling rate, closing at $37.15 and $39.65, respectively. Public rates for the dollar decreased by 10 cents overall in February.
Regional Context: Brazil and Argentina
In Brazil, the dollar rose 0.22% yesterday, closing at 5.1495 reais. However, it fell 1.54% in February and 6.41% year-to-date. In Argentina, the official dollar rate decreased by 0.78% yesterday, closing at 1,397 Argentine pesos. The dollar fell 3.5% in February and 4.28% year-to-date.
Risk and Interest Rates
The country risk, measured by the UBI Index from República AFAP, increased by three basis points to 73 basis points at the end of February. This rise was driven by increases in both Uruguayan bond prices and US Treasury yields. The index increased by eight basis points in February and seven basis points year-to-date.
The call interest rate, representing the rate banks charge each other for overnight loans, averaged 6.56% in February, aligning with the central bank’s target of 6.5%.
Looking Back: 2016 as a Precedent
The current situation echoes the trends observed in 2016. Data from 2016 shows the dollar began the year at $30.70 and ended at $29.68, representing a 3.322% decrease. The highest value in 2016 was $32.58 (March 4th), and the lowest was $27.95 (October 25th). The average price for the year was $30.14.
FAQ
Q: What is driving the dollar’s decline in Uruguay?
A: Several factors contribute, including regional economic conditions and government policies.
Q: How does Uruguay’s dollar performance compare to its neighbors?
A: The dollar is falling less rapidly in Uruguay than in Argentina and Brazil.
Q: What is the current trend in country risk?
A: Country risk is currently increasing, but remains relatively stable.
Q: What was the dollar’s performance in 2016?
A: The dollar decreased by 3.322% in 2016, starting at $30.70 and ending at $29.68.
Did you understand? The longest period of consecutive dollar increases in 2016 lasted 10 trading days, between February 19th and March 3rd.
Pro Tip: Keep an eye on economic indicators in Brazil and Argentina, as they often influence the Uruguayan peso’s performance.
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