Through a Twitter thread, the former Minister of Finance, Mauricio Cárdenas, explained why in Colombia the dollar moves between the $4,800 and $4,900taking into account that in other countries in the region, the devaluation of their currencies is much less.
(Dollar fell sharply from $75 and closed below $4,800).
“If from June 20, 2022 the Colombian peso (COP) had behaved like the currencies of Mexico and Chile, it would now be at 3,500 per dollar, and if the currencies of Brazil and Peru had been followed, it would be at 4,000. Why is it at 4,800-4,900?”wrote Cárdenas as a preamble to his explanation.
I open thread. If, from June 20, 2022, the Colombian peso (COP) had behaved like the currencies of Mexico and Chile, it would now be at 3,500 per dollar, and if the currencies of Brazil and Peru had followed, it would be at 4,000. Why is it at 4,800-4,900? pic.twitter.com/upy8srJQnr
— Mauricio Cárdenas S. (@MauricioCard) February 23, 2023
According to the former minister, the explanation that the devaluation corresponds to a global trend is not true. Nor does he believe that it is about uncertainty due to fiscal management, since Colombia’s has been better than Brazil’s.
For Cárdenas, the main reason why the dollar in Colombia is above the general average for countries in the region is due to the uncertainty generated by government decisions and announcements on various fronts.
(What to invest in in 2023 given the high volatility of the dollar).
“For me, the main reason is the uncertainty generated by government decisions and announcements in the mining, energy, health, pensions, public services, etc. sectors.” explained in his thread.
Finally, he stated that the devaluation is the main reason why food inflation has not subsided (despite the fact that international prices are already falling).
For him, “uncertainty has passed a high collection account to the most vulnerable sectors” from the country.
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