The price of the dollar is still off the hook and this Monday -April 4-, at the beginning of a disturbing week for the Colombian market, the currency has come to trade -even- below 3,700 pesos.
The day started at a price of 3,740 pesos, from 3,777.79 of the Market Representative Rate (TRM) that governs for this Monday. However, as the hours passed, it began to lose value once morest the Colombian peso and has reached a minimum of 3,690 pesos, according to information from the Colombian Stock Exchange.
The US currency has been traded in Colombia at an average price of 3,705.60 pesos and a maximum of 3,740 on this day
In any case, he would be losing 69.19 pesos. The figure for the loss of value of the dollar once morest the local currency is close to the levels recorded on March 3 of this year, when it fell by 78 pesos and It was the day that the world’s economic sanctions once morest Russia were announced (mainly those applied across Europe, the United Kingdom and the United States), which led to an increase in the price of oil. Consequently, the reason given by José Ignacio López, director of economic research at Corficolombiana, is that the dollar continues to be affected by the global situation that unleashes the crisis due to the conflict between Russia and Ukraine.
Although, in general, many analysts estimate that the dollar-oil equation is no longer so dominant when it comes to registering a behavior in the price of the currency, this time it would be one of the reasons, which López explains with the rebalancing of the call Global GBi-EM Index, from where Russia was withdrawn, by JP Morgan, which is the one who makes said index. This would have led to a movement in the position of emerging countries in that indicator that tracks the sovereign debt of developing nations. The exit of Russia implied an available quota of 16,575 million dollars that went to the market for purchase. Colombia, for example, went from having a participation of 3.97% in the aforementioned index, to one of 4.56%, an estimated flow of 1,475 million, according to a Corficolombiana document.
He also plays the local
Some analysts are in favor of the fact that the rise in interest rates by the Banco de la República, within the application of a monetary policy to contain inflation, also has something to do with the strength of the Colombian currency. The fact that measures are taken might help the high consumer prices to be reversed, although the question remains when. It must be remembered that inflation rose vertiginously, from the levels at which it had been for years (in a range of 2 to 4%), and it is still unknown if putting it back where it was will be done with the same speed. Many hope that the data that the Dane will deliver on April 5, corresponding to March inflation, will be the guide to establish how much the year might close and if the upward trend would change following the first semester.
Rising interest rates, to control inflation, is still a signal that indicates that a balance is being sought, which undoubtedly strengthens the local currency once morest the dollar.
