Everything you need to know about the parallel exchange rate

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Everything you need to know about the parallel exchange rate

Junio 2012

The depreciation of the parallel exchange rate is taking center stage and is raising questions about what does it mean, whether it is sustainable at these levels and about the implications that it has for inflation, interest rates, growth and imports.

More importantly, it also raises questions about what policy measures the government can take in order to deal with the issue. The initial Government’s reaction was to downplay the problems and emphasize that the parallel market is very small (it probably trades around 40 million dollars a day), though it is clear that the government is concerned about this issue and that it will need to make policy decisions.