Why Colombia could be at risk of defaulting

The director of Public Credit, José Roberto Acosta, warned that Colombia is at risk of entering into default. In other words, of not complying with the payment of its financial obligations. “by not having the capacity to continue honoring the credits it has, especially with multilateral banking.”

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According to the official, this situation occurs because, since Congress approved the expansion of the borrowing limit of 17.607 billion dollarsthe Interparliamentary Commission on Public Credit has not achieved a quorum.

“On up to six occasions, the need to allow the National Government to issue bonds abroad and sign multilateral banking credit contracts that are needed to continue honoring credit payments and debt service has been considered.”Acosta said.

It should be remembered that these payments are made from the National Treasury to international creditors. This considering the General Budget Law of the Nation and based on what is agreed in each current external credit contract.

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(See: In 2023, half of the debt payments of cities and municipalities went to interest)

The Interparliamentary Commission must meet to authorize or deny the issuance of bonds or the contracting of external loans and, although its opinion is not obligatory for the Government, without this procedure debt coverage operations are paralyzed.

In this order of ideas, if more credit is not contracted in foreign currency, the country’s cash in dollars will decrease, which makes it difficult for the Nation to service its debt.

According to what EL TIEMPO was able to find out, it is currently pending the approval of loans for up to 11.8 billion dollars. Of this amount, $5 billion is with multilateral banks and $6.8 billion is in sovereign bonds in international markets.

(See: Once again, the National Budget would be exposed to vices of unconstitutionality)

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