Colombian peso starts trading this Tuesday as one of the most devalued currencies in the world

Dollar would reach $7,000 if oil exploration is suspended as proposed by Gustavo Petro, according to Corficolombiana.  Photo: Colprensa and Reuters.
Dollar would reach $7,000 if oil exploration is suspended as proposed by Gustavo Petro, according to Corficolombiana. Photo: Colprensa and Reuters.

After a long day of voting throughout the country, Colombians chose the leader of the Historical Pact, Gustavo Petro, as the new president of Colombia. His campaign was crossed by different opinions and rumors about the impact that his position could bring to the country’s economy, even some Colombian media pointed out that the results negatively influenced the behavior of the dollar.

The issue of the value of the dollar was positioned in the country and in Internet searches after announcing the victory of the Colombian left at the polls. However, until this Tuesday it was possible to verify what was indicated in the past days, since on Monday there were no foreign exchange negotiations due to being a holiday in Colombia.

After the many rumors this June 21, the value of dollar in Colombia has reported multiple variations showing great volatility. In the early hours of the day, was positioned at $4,098, that is, it opened with a strong increase of $193almost 4% above the $3,905 with which it closed last Friday, the last trading day, before the holiday break this Monday in the country.

After a few hours the value decreased until it reached $4,016 and according to the volatile behavior of the currency, it could go down. But so far it remains above $4,000; price similar to that achieved in May, when the value of the US currency was affected by the shortage of some raw materials and key products due to the conflict in Ukraine.

According to La República, an analysis by Credicorp Capital indicates that after the victory of the Colombian left, the dollar could approach $4,100, but everything will largely depend on the proposals promoted by the new government.

“In the following days, the behavior will depend on the signals given by the new government and additional pressure cannot be ruled out. That said, we do expect an increase in populist proposals in the future given the current political and social context, while the Petro government plan is clearly aimed at increasing the role of the state in the economy and withering the oil sector. Thus, the fiscal accounts remain our main concern, which should play a role in the markets”, reads the document.

What was said by Credicorp Capital goes hand in hand with what was declared over the weekend by the Minister of Finance, José Manuel Restrepo. The official noted for Caracol Radio, that it is very premature to affirm that the favor of the dollar depends on the elections and the figure of the newly elected president. In addition, he explained that the photos shared on social networks about the exchange house where the dollar would be at 5,000 pesos are isolated cases.

It is worth remembering that after the first round −which took place on May 29−, the exchange rate registered a sharp fall of more than $150 on May 31 and was quoted close to $3,800. According to figures from El Espectador, on the first business day after the first round, the dollar registered one of its strongest falls in its history: from $3,926 to $3,770.

It should also be clarified that, during this day, other factors intervened in the markets, such as the sanctions against Russia −for the invasion of Ukraine− or the rise in oil prices, which were above 120 dollars, although there are analysts who They say that the variation was due to the electoral results.

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