Increase in the Exchange Rate

In view of the health situation that we are going through in the country with the COVID-19 virus, the banks have not yet issued any statement establishing a position or mentioning something about the increase in interest rates, due to the increase in the dollar.

Some companies opt for “CURRENCY HEDGES”, in which it is decided to establish a common exchange rate for all those transactions that will take place during a given period, they are regulated by a financial intermediary (Bank-Broker).

For its part, BANXICO has issued a statement announcing the SWAP LINES, with the United States Federal Reserve Fund, here they announce the temporary mechanisms for the exchange of currency, in order to reduce the tension in the markets (notice attached).

Where one can see a tangible effect from the fluctuation of the exchange rate, it is in the purchase of currency at the moment. However, there is also a positive impact when selling them, as this fluctuation benefits people who bought the American currency at a lower price.

Experts say that after the health contingency the real impacts of this increase will be reflected, since for now the global economy is in a state of speculation.

Bandala, Díaz, García, is an expert Firm in financial administrative matters. If you have any of this or any other topic, please contact us.