Compared to the regional average, the dollar would still be high

Although the internal political scandal has coincided with the greatest revaluation of the peso in recent days, that would not be the main cause of the collapse of the dollar but international factors.

(See: The dollar in Colombia was traded at less than 4,200 pesos).

The other currencies of emerging countries in the region, such as the Mexican and Chilean pesos, the Brazilian real and the Peruvian sol have also been registering increases against the dollar (revaluation) for several months and even, taking the movements of these currencies against the greenback as a reference, the peso would still remain high at around $568.

Some analyzes show that taking into account the behavior of these currencies taking January 2022 as a starting point, the Colombian peso began to misalign towards the middle of that year (see graph).

The highest point of The price of the dollar in Colombia arrived on November 8, 2022, touching $5,061 that is, $851.86 more expensive than today’s rate of $4,209.14.

And during 2023 the dollar in Colombia has dropped $601, with which the peso has strengthened (revalued) against the dollar by 12.5%.

Analysts have views on this behavior and although the internal issue would be playing, what happens in the world market rules.

That’s how he considers it Diego Alejandro Blanco, director of investment strategies at Acciones & Valores who assures that despite the fact that some think that if the government is doing badly, the country and the markets are doing well, the truth is that this is not true and it is the international context that is setting the tone and the internal political issue contributes.

“If you look at the behavior of the region, you can see a revaluation of the currencies, since coming out of the chapter on the debt ceiling in the US, we once again focus on world inflation and the rise in rates and it is seen that resources are entering emerging countries”.

He considers that the peso is one of the most volatile currencies in the world and is accentuated by internal political risk and assured that in any case there is uncertainty about the Government and its reforms.

For his part, Felipe Campos, Alianza Valores y Fiduciaria Investment and Strategy Manager, says that in the end, “the best thing is that the fall in the dollar benefits us all.

Inflation should fall faster now, so should interest rates (take advantage of those CDTs and stay out of debt if you can). Colombian stocks are down 30% on election day. We come from good economic growth and that helps in the face of the global slowdown. Foreign investment, especially in raw materials, will continue to take advantage of the fields it has with the current price of oil”.

(See: Why the dollar in Colombia is devalued despite the political crisis).

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