in three days, the price of the dollar fell more than 100 pesos and it has returned to a minimum not seen in almost 13 months, but this devaluation is not unique to Colombia but has been repeated in many countries around the world.
Last Friday, this currency averaged 4,089.12 pesos, a similar value was last seen on 29 June last year (TRM was 4,089.72 pesos). Equal, the day’s closing price was lower: 4,052.45 pesos.
Ten days after the election President Gustavo Petro On November 8, 2022, an uptrend began that took the dollar to a peak of 5,061 pesos, a price never seen before in the country.
However, the fact that both the international situation and the situation of the country were different from those days caused the Colombian peso to gain value again. José Ignacio López, Director of Economic Research at Corficolombiana, points out that one of the reasons pushing the dollar down is the US Federal Reserve (Fed). you are reaching the limit of increasing your interest rates.
“Most likely, it will rise by 25 basis points and end the cycle of increases and then begin a cycle of lowering rates,” he adds.
Meanwhile, Felipe Campos, Director of Investment and Strategy at Alianza Valores y Fiduciaria, reassures: Dollar falls faster in 2023 because last year “investors were unsure about a country that could undergo many structural changes.”
Because they discounted it, dollar started to recover what it didn’t have last year is already realigning with the world trend and doing it much faster because it lags behind.
Despite the devaluation seen in recent weeks, in the second half of the year Dollar may experience new recovery due to various aspectsexplains Juan David Ballén, director of analysis and strategy at Casa de Bolsa.
The first is about the Fed, he says he expects the market to keep interest rates steady, and if he raises it, the currency could go higher.
The social reforms of the National Government will also be effective.l, especially the pension, which will be discussed again on July 20 when the sessions of the Congress of the Republic are established.
“Either way, things look good for now. Inflation is falling in the US“The expectation is that the Fed has less pressure to raise rates and that the Government has lost its manageability at home, which would have to soften reforms if it decides to continue the reform process,” Ballén said.
This Regional elections to be held at the end of October It could also have an impact on the behavior of the U.S. currency in the country, “if a respite for the government and a recovery of presidential approval,” Felipe Campos says.
However, “the people realized that the country was much more resilient and stronger, and with a great regional appetite For such events to change the direction of the dollar”.
A cheaper dollar benefits consumers because bull behavior is re-emerging. Cheaper to travel to dollarized countries and buys imported goods such as appliances, technology and vehicles, but hurts exporters as they start to get less dollars from their sales.
After investors confirm that the social reforms do not affect the rules of the game in Colombia and that all the noise has been overcome, the dollar can range from 3,500 to 3,400 pesosAlianza Valores guesses the expert.
Those from Corficolombiana forecast the dollar to be around 4,200 pesos by the end of the year due to ongoing fears of a possible economic recession in the United States.
If it’s Ballén from Casa de Bolsa, recession in the USA The dollar could close 2023 between 3,800 and 4,200 pesos if the country’s reforms are moderated.
The fact that interest rates will not increase further in the US reduces the upward pressure on the dollar worldwide,” he said.
ECONOMY AND BUSINESS