The price of the dollar in Colombia began December above $4,400. However, several economic research centers project that the foreign currency will end up between $4,320 and $4,350.
(Read: Minimum wage in 2025: the ABCs of the discussion to define the increase).
Entities like JP Morgan, BNP Paribas, Ebury, Barclays, Mitsubishi Financial Groupamong others (see projections below) estimate that the US currency will close 2024 below $4,400.
According to a financial analysis by the Faculty of Economic and Administrative Sciences of the University of San Buenaventura, Bogotá headquarters, the volatility of the exchange rate in Colombia “will continue to be the constant” at the end of the year as the markets continue to expect the impact that the economic initiatives of Gustavo Petro’s Government could generate, particularly those currently being discussed in Congress.
Investors remain hopeful about the outcome of the tax 2.0, labor and health reforms, three bills that could put foreign investment in check.
(See: Financing law would be left with no other option than to go to extraordinary sessions).
“Likewise, greater fiscal risks in the country, as a result of lower than expected tax collection, have led the dollar to trade above $4,300 in recent weeks. For now, expectations of a significant drop are distant”says Héctor Julián Sánchez, dean of the Faculty of Economics and Administrative Sciences of the U. of San Buenaventura.
However, Sánchez adds, “The expectation of an acceleration of the Bank of the Republic’s flexibility cycle would impose a floor on the currency. In other words, a further cut in interest rates would also help stabilize this currency in Colombia; However, this would not be felt in the short term”he explains.
Regarding the international panorama, the markets also remain expectant of the decisions made by the newly elected president of the United States, Donald Trump, but specifically there is concern about what may happen regarding the Federal Reserve and its position regarding whether it maintains rates. of interest as they are, increases or decreases them.
Also, There is expectation about the escalation of the war between Russia and Ukraine and there is alarm about the outcome of the conflict between Israel and Hamas in Gaza, that continues to keep the world in suspense and shake the markets, particularly the price of oil.
(Here: Gasoline sales in Colombia have already been negative for more than 16 consecutive months).
At the same time, other monetary policy decisions in the world, particularly the actions taken by the central bank of Japan, would also play an important role in the price of the American currency in the country. At the same time, the election of Claudia Sehinbaum as president of Mexico also adds pressure to the price of the Colombian peso, which suggests that the goal of one dollar to $4,000 is still very far away. “To take into account, Mexico has devalued 25% since May and Colombia 15%”indicates Sánchez.
So, says the expert, “In November the rate will end the month with a greater increase that will be in a range between $4,339 and $4,405, while in December a value of $4,324 is expected, which represents an increase compared to the previous month’s forecast ($4,150)”.
Finally, for next year, Sánchez concludes, “the market will maintain expectations as to whether the exchange rate will continue to fall, amid strong scenarios of local and foreign uncertainty.
Other projections of the price of the dollar at the end of 2024
Ebury and Barclays: $4,100.
Rabobank, RBC Capital Markets and TD Securities: $4,135.
Wells Fargo Bank, Bank Julius Baer and Mitsubishi Financial Group: $4,200.
BBVA: $4,420.
JP Morgan and BNP Paribas: $4,250.
Santander Bank: $4,350.
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