While for some, a lower price in the international currency is good news for the pocket, given the costs of importing products such as spare parts. In the agricultural sector, there is alert, for example before the drop in coffee prices.
Diary of Huila, economy
By: Gloria Camargo
Several economic unions are paying attention to the downward trend that the price of the dollar has experienced in recent weeks.
Analysts maintain that this decrease could take the currency below 4,000 pesos. The representative market rate (TRM) was located at approximately 4,168.88 pesos for the penultimate weekend of June, remaining until June 26.
However, uncertainty arises as to whether the dollar will continue to fall during the last week of the month or if it will experience a rebound in its value due to President Gustavo Petro’s announcement of declaring an economic and social emergency, which generated a small rise on Friday the 23rd. of June.
This downward trend in the dollar has generated expectations and debates in various economic sectors. If the price of the currency continues to decline, it could have both positive and negative implications for different market players.
On the one hand, importers could benefit by purchasing foreign products at a lower price, which could contribute to greater competitiveness and lower production costs in certain sectors. On the other hand, exporters could face challenges as a weaker dollar reduces local currency earnings from foreign sales.
However, there are doubts as to whether this downward trend in the dollar will continue during the last week of the month. The declaration of an economic and social emergency by President Gustavo Petro has generated uncertainty in the market.
Although there was a small rise in the value of the dollar after the announcement, it is not yet possible to determine if this trend will continue or if there will be a rebound in the next few days. Analysts are keeping an eye on events and will assess how the economic situation unfolds to get a clearer view of how the dollar will behave in the near term.
currency purchase
Many currency buyers wonder if it is a good opportunity to acquire dollars in the current economic environment. Experts on the subject have shared their opinion and offered keys to clear up doubts when carrying out a foreign currency purchase operation.
This downward trend in the dollar has generated expectations and debates in various economic sectors.
However, it’s important to note that the dollar is a highly volatile currency, which means that while it can be gained if it goes up, it can also be lost if the downtrend continues, according to Wilson Tovar, director of economic research at Equities and Values.
Tovar suggests that, for now, it would be a good option to buy dollars only if you have a clear purpose of use, otherwise there is a risk of loss if the currency continues to fall.
Alexander Ríos, founder of Inverxia, points out that it is possible for the dollar to easily reach levels below 4,000 pesos, which could be taken advantage of by those who speculate that the price of the currency will increase in the long term as part of their strategy. savings or investment.
However, one must take into account the volatile nature of the market and carefully evaluate the projections before making a decision.
On the last day of the week, the dollar closed at 4,168.80 pesos, an increase of 54.41 pesos compared to the Representative Market Rate established at 4,114.39 pesos.
This happened after the currency experienced a decline with losses of 44 pesos on Thursday and reached intraday lows below 4,100 pesos. However, on Friday the currency registered minimums of 4,100 pesos and maximums of 4,218.90 pesos, with a trading volume of 1,220 million dollars in 1,980 transactions.
These movements were attributed to the economic and social emergency announcements made by the Government, which generated volatility in the exchange market.
coffee maker concern
The Huila Departmental Committee of Coffee Growers has expressed its concern about the impact that the recent economic fluctuation is having on the more than 84,000 coffee-growing families in the region.
According to the Executive Directorate of the committee, there is great concern about the drop in coffee prices in recent weeks, added to the high cost of inputs, which puts the sustainability of producers and the well-being of coffee-growing families at risk, who They play a key role in the local economy.
According to data from the National Federation of Coffee Growers (FNC) until Friday, June 23, the internal reference price per load of 125 kg of dry parchment coffee was established at 1,438,000 Colombian pesos, while in Neiva it was located at 1,436,750 pesos. This situation is discouraging, since in June 2022, the monthly average price of a coffee load reached 2,172,233 pesos, according to Almacafé records.
In Colombia, and particularly in Huila, there are three fundamental variables to determine the price of coffee: the exchange rate, the Colombian coffee spread, and the New York Stock Exchange. These variables have shown a downward behavior in the last three weeks, which has led to the domestic price of coffee in the country being at very low levels.
Faced with this situation, the Departmental Committee of Coffee Growers of Huila reiterated its concern and calls for an exhaustive analysis of the situation, in order to take actions that help mitigate the negative effects derived from the drop in the price of the grain. Likewise, they requested the pertinent institutions to take measures to prevent the price of coffee from continuing to decline.
Exchange rate
The Colombian Finance Minister, Ricardo Bonilla, has affirmed from New York that if the consumer price increases gradually according to expectations in the next six months, the Bank of the Republic could reduce its interest rate by two percentage points to end of the year.
While by June 2022, the coffee load was quoted at $2,172,233, today its value is $1,436,750.
According to the official, rates are expected to hold steady this month, but will be monitored over the next two to three months to see if it is possible to start cutting rates from September.
In contrast, at the Latin American level, Chile is expected to be the first of the region’s five main inflation-targeting central banks to cut rates to maintain stability.
For its part, Brazil is debating whether to cut the Selic rate in August or September. Although the difference may be significant after one year with an official interest rate of 13.75%, the truth is that borrowing costs will decrease at a time when Brazilian companies need financial relief.
In Mexico, the picture is somewhat more complicated. While inflation has been on a downward trend, the core gauge was still hovering around 7% at the start of June, nearly two percentage points above the headline reading. This poses challenges when making decisions about interest rates in the country.
As for Colombia, where general inflation of 12.36% is registered (the highest among these five banks), there is an expectation regarding interest rates. According to Bonilla, a cut is possible in September and a 200 basis point reduction could be achieved by the end of the year.
Decisions on interest rates are of vital importance for the economic and financial stability of each country.
In the case of Colombia, the Bank of the Republic is expected to carefully evaluate the economic indicators and the evolution of inflation to determine the appropriate moment for a rate cut. The next few months will be key to see how this situation develops and what impact it will have on the country’s economy.