This Friday, October 14, the dollar in Colombia registered a sharp spike and rose more than 100 pesos since its opening at 8:00 am For the first time in history, it was quoted above 4,700 pesosspecifically, reached 4,707 pesos.
However, this price was recorded only for a few minutes because then it fell again to close the day this Friday at 4,698 pesos, although it is also a value never seen before in Colombia. In a single day it rose 143 pesos, which implies a strong devaluation of the Colombian peso against the US currency.
Compared to the Representative Market Rate (TRM) that the Financial Superintendent set for this Friday at 4,619 pesos and 78 cents, the increase in the dollar was more than 78 pesos, but if it is compared with the closing price of this Thursday, October 13, which was 4,574 pesos, the rise is greater, of 124 pesos.
After opening the day at 4,555 pesos, the US currency reached a minimum price of 4,548 pesos with 25 cents, while the The maximum price at which it was quoted was 4,707 pesosaccording to data from the Colombian Stock Exchange.
The average price of the dollar was 4,638 pesos and 61 cents, which is the reference used by the SuperFinanciera to set the TRM that will govern during the weekend and until next Tuesday, since this Monday is a holiday.
The 4,698 pesos this Friday is the highest price that the dollar has been registered in Colombia to date, after the 4,625 pesos reached on July 12. In addition, it is worth noting that the currency lasted four consecutive days, trading above 4,600 pesos.
What are the reasons for the sharp rise in the dollar price in Colombia?
Economic analysts agree that this time, the rise in the price of the dollar in Colombia is due to external effects such as: the cost of living in the United States, which although it had a slight drop in September of this year compared to the previous month, since it is still high, standing at 8.2%, it fell only one percentage point.
“What is generating the expectation is that interest rates continue to rise and by raising rates, the United States compared to the rest of the world, is generating uncertainty so that there is a flow of capital that could leave countries such as Germany, Spain or the United Kingdom. towards the United States, which is why it generates an appreciation of the dollar at a global level that is felt naturally in Colombia”, affirms Andrés Langebaek, economic analyst.
Another explanation given by the experts is due to the drop in oil prices. For example, the price of a barrel of Brent (the reference for Colombia) is falling 2.97% this Friday to 91 dollars, when it started the day at 95 dollars.
“For this reason of the drop in oil, there is the fear that the increase in the Federal Reserve rate will actually generate a slowdown or a recession in global growth, both effects are adverse for Colombia because less capital enters the country” added Andres Langebeak.
On the other hand, there is high speculation, because by having strong pressures on the price levels of food and household goods, It’s going to force the Federal Reserve to raise interest rates.
“Today there was speculation that it would not be 70 basis points but 100, which makes the US dollar a very attractive currency, since interest rates in dollars are still attractive,” says Édgar Jiménez, an economics expert at the Jorge Tadeo Lozano University.