Title: Colombian Peso Strengthens Against Weakening US Dollar in Interbank Market
Date: [Current Date]
The dollar in the Colombian interbank market continues to lose ground against the Colombian peso on Monday. At the start of the week, the US currency dropped a further 17.4 pesos, with the initial rate standing at 3,954 pesos for one dollar. According to the Electronic Trading System (SET-FX) of the Colombian Stock Exchange (BVC), the average trading rate in the first half hour of operations was recorded at 3,949 pesos.
Interestingly, the negotiation of the dollar in Colombia reached a minimum price of 3,938 pesos on Monday, positioning it 33 pesos below the representative market rate (TRM) of 3,971.38 pesos set for the day.
Market analysts have emphasized that both local and international factors suggest that the US currency will continue to remain weak in the coming months, contributing to increased volatility. The Minister of Finance, Ricardo Bonilla, confirmed this sentiment, stating that the exchange rate is reaching pre-pandemic levels and that the government’s fiscal adjustment plans are being recognized by the markets.
Regarding external forces affecting the dollar’s decline, Felipe Campos, Manager of Economic Research at Grupo Alianza, explained that the global expectation of the United States central bank (Federal Reserve or FED) lowering interest rates next year is contributing to the weakening of the dollar. He further added that a weaker dollar would be beneficial for Latin America, presenting significant potential for the region to recover from the impacts of the pandemic.
Campos also expressed his belief that social reforms and upcoming regional elections in Colombia could support this situation. However, he emphasized that regardless of the election outcomes, the market will continue to focus less on political factors and instead prioritize adherence to government rules and stability.
In light of these factors, Campos suggested that the dollar will likely settle into a new range, potentially reaching the pre-pandemic level of 3,400 pesos per dollar in the upcoming two semesters.
The continued weakening of the dollar against the Colombian peso is expected to have significant implications for the local economy, trade, and investing activities. It remains to be seen how these dynamics will unfold in the coming months.
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