The reasons for the recent fall in the price of the dollar in the country

He Colombian pesodespite the global financial crisis, has been strengthened compared to the American dollarmaking the country’s currency one of the emerging currencies that have gained the most ground on the US currency in the last month.

Seeing is believing: the dollar, for March 29, it closed at a price of 4,636 Colombian pesosthe lowest since January 26, 2023when the US currency had an exchange rate of 4,515 pesos.

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One of the reasons why the peso gained ground against the dollar was the generalized economic crisis in the worldsince this seems to have been solved after the regulatory measures that the central banks implemented by providing the necessary liquidity, thus causing the risk aversion that had been generated to have decreased significantly, which has once again caused optimism for risk in emerging countries , among these Colombia, as explained Sergio Olarte, Principal Economist at Scotiabank Colpatriaquoted by EL TIEMPO.

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Locally, This situation can be explained by the decision taken by the Banco de la República to increase the intervention rate by 25 points, reaching 13%. This is due, among other reasons, to the confidence that the Issuer has that inflation in the country is very close to reaching its ceiling, from which it will begin to drop.

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“The Banco de la República seems to have almost finished, if not already finished, raising its interest rates. Stability is beginning to be projected, which generates certainty, making it possible to start investing in a more structured way in the country, hoping that the next movement will be a drop in rates towards the end of this year”, Olarte mentioned.

Similarly, the expert added that the international market is waiting for what may happen in the future of the package of reforms (labor, pension and health) filed in the month of March: “The market is seeing that changing the status quo in the country requires in-depth discussions and consensus, demonstrating solid institutions, as well as solid economic strength.”.

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Germán Cristancho, manager of economic research and strategy at Davivienda Corredoresassured for his part that the caution that the reforms have had have managed to gradually alleviate the pressures that the Government’s fiscal accounts would have and, therefore, the concern of international investors: “All this has resulted in a strengthening of the weight and it could be maintained in the coming days and weeks.”.

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