The Nation / Dedollarization of public debt generates confidence and promotes savings in guaraníes

This Friday, the Minister of Economy and Finance, Carlos Fernández Valdovinos reported that the economic portfolio carried out the first successful conversion operation of loans expressed in US dollars to local currency.in order to avoid fluctuations that affect the service of public debt.

About that, the economist Jorge Garicoche explained to La Nación/Nación Media that This is the path that the government must take to mitigate the exchange rate risk, and generate confidence for future bond issues in guaraníesand in turn, promote savings in our local currency.

“This shows confidence, I think it is the way and that we also do it in the international market like Uruguay, which goes out to look for money in international markets and says, gentlemen, andThis enormous mission, this important investment is going to be in Uruguayan pesos. And the world believes them, but they have already traveled a path like the one we are traveling now.“Garicoche told LN.

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He stressed that this great step helps the government mitigate the risks in the event that the exchange rate shoots up, due to factors that cannot be controlled locally, so it is not in such danger and gave as an example when the former president of the United States, Donald Trump, tweeted against Iran or China and the market reacted negatively, which ended up affecting our economy.

“I think it is a very interesting idea and also the possibility that this, in the end, will generate movement of internal savings.”. That we Paraguayans be encouraged more and more, with the little we earn perhaps, but to generate savings so that this savings is also a channel for investment“, he emphasized and finally, clarified that it is not a reduction in the debt, which occurred, but rather a change from dollars to guaraníes to a part of the total.

The conversion to guaraníes was an amount of USD 100,000,000, with a remaining term of 13 years with an already converted interest rate of 6.30% plus the own margin of the multilateral bank that is the Inter-American Development Bank (IDB).

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