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The dollar in Colombia exceeds its historical maximum and reaches 4,650 pesos

A man stands in front of a currency exchange agency in Bogotá, in June 2022.
A man stands in front of a currency exchange agency in Bogotá, in June 2022.IVAN VALENCIA (AP)

The dollar in Colombia reached its all-time high this Thursday morning. He broke all records. The US currency opened the day on Thursday at 4,585 pesos on average, rose more than 130 pesos during the first hours and at times reached 4,657 pesos, 67.5 above its historical record of July 12, when it was traded at 4,589 pesos, according to the Set-Fx platform.

With this rise, the Colombian peso falls more than the currencies of the other large Latin American economies, with a devaluation of more than 3% in a few hours. The Brazilian real fell by 0.48% and the Chilean peso by 1.3%. All this occurs one day after it was revealed that the country is facing the highest inflation of the century, which reached 11.4% so far this year, and the same day that Congress begins to discuss the tax reform, with which the government expects to collect up to 25 billion pesos, around 1.5% of GDP, in 2025.

The rise in the dollar also occurs just one day after President Gustavo Petro said on his Twitter account that raising the rates of the Banco de la República does not serve to contain inflation and that a tax could be imposed on capital flows. . “Is it useful to raise the interest rate to contain inflation?: No,” the president wrote. And he added: “If interest rates are being raised to prevent capital flight, a transitory tax could be put on those flows.”

Former Finance Minister Mauricio Cárdenas insists that this spike in the currency is due to political and not economic reasons: “The two global currencies that are falling the most today are the Russian ruble and the Colombian peso. The two oil exporters whose price goes up. What is the explanation? It’s not the economy, it’s politics,” he wrote on his Twitter account. The analysis of Juan David Ballén, Strategy Director of Grupo Aval, goes along the same lines: “Suggesting capital control is a bad idea, it will generate greater devaluation, inflation, rates and decrease.”

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