The fall of the dollar will happen sooner than expected

In the first 199 days of 2023 The peso is the most strengthened (revalued or appreciated) currency in the world, with 17%.

(See: Reasons for the fall of the dollar to the level of July 2022).

The dollar has fallen by $819.05 in Colombia this year, a drop of $324.26 over the past 12 months, while the Colombian currency has climbed from its highest point in history. It was down $1,070.06 from $5,061.21 on November 5, 2022.

The representative market rate (official dollar) today’s record of $3,991.15 represents a drop of $78.24 compared to Tuesday and the lowest since June 21, 2022.

Although Analysts say much of this appreciation movement in the Colombian currency is due to external factors.Due to the greater weakness of the dollar globally, a lower perception of risk to the Colombian economy and hence greater attractiveness, led to the entry of dollars.

(See: Colombia to Host Next Celac Summit).

Yesterday, portfolio, foreign direct investment in the first semester reached 7,519 million US dollars, the highest in nine years.

In yesterday’s trade, the market opened at $4,012, touched a low of $3,971.10 and finally settled at $4,001.

According to Pancolombia’s behavior was encouraged by a strong adjustment in market expectations regarding the US Federal Funds interest rate.

There will be a consensus of analysts The central bank ruled out fresh rate changes in the short term due to signs of low inflationary pressures. US retail sales slowed in June and industrial production shrank.

In Colombia The indicator to track the economy surprised the market positively by registering a 0.65% advance. In May, this contrasted with the contraction seen in April and reflected a slowdown in Colombian economic activity.

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(See: Dollar Extends Its Losses Earlier in the Week).

Dollar in Colombia


Despite the above, major currencies of the region weakened.

This year The Mexican peso rose 14%, the Brazilian real 9.1%, the Peruvian sol 6.4%, the euro 4.7% and the Chilean peso 4.1%.

According to the Refinitiv site, The Colombian peso is the most valuable currency in the world, followed by the Mexican peso, the Sri Lankan rupee (11.29%) and the Iraqi dinar (10.25%).

Finance Minister Ricardo Bonilla said during the CreditCorp forum yesterday that this downward move of the dollar in Colombia was explained. “Due to the positive market reaction to the implementation of the fiscal policy commitment, changes are being made to the economy as the fuel funding deficit is resolved.”

For his part, Diego Rodriguez, co-founder and managing director of Bosque Capital, said retail sales data in the US came in below expectations. And they made more declines and early minimum prices occurred and the market accelerated, but it did not forcefully break the $4,000 floor as Latin American currencies did not strongly follow the trend.

As the researcher mentioned Next week the central bank will decide on interest rates and it will be known if it is a downward trend The dollar continues to appreciate in Colombia.

Despite the dollar’s fall in Colombia, it is relatively low against the Mexican peso, Chilean peso and Brazilian real, leaving room for further falls and if the central bank does not raise rates.

(See: Falling Dollar: Its Effects on the Economy)

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