Travel, payment of debts and investments, are some of the measures that opites could take given the downward trend of the international currency, being the lowest level in the last 13 months, after reaching a trading average of $4,089.12.
Diary of Huila, economy
By: Gloria Camargo
Recently, the dollar experienced a decrease of $13.01 and reaching a trading average of $4,089.12.
This level marks not only the lowest minimum so far in 2023, but also the lowest level in almost 13 months.
An important milestone, since for the first time in more than a year, since the last week of June 2022, the dollar was around $4,000. On the 29th of that month, the representative market exchange rate (TRM) was $4,089.
The Colombian peso has maintained its position as the strongest currency against the dollar among emerging markets this year.
According to the Bloomberg Currency Index, as of Friday’s close, the Colombian peso has experienced a rebound of 18%, surpassing the Mexican peso, which has registered an increase of more than 16%. In third place is the Hungarian forint, with a growth of 12.07%.
Local operators have observed an interesting trend in relation to the dollar in Colombia. Since last year, the US currency has been subject to a risk premium that has gradually been declining.
According to Juan David Ballén, Casa de Bolsa’s director of analysis and strategy, he pointed out that it is possible that the dollar will close soon in a range between $3,800 and $4,300. This trend is attributed to the end of the cycle of interest rate increases in the United States and to a lower perception of risk on the part of the local government.
This trend reflects the influence of the exchange rate on fuel prices and its impact on the national economy.
volatile stock
The price of the dollar in Colombia shows a slight rise this Sunday, July 16, trading at 4,089.30 Colombian pesos. Compared to the previous day on Saturday the 15th, the North American currency registers a barely considerable increase of about 2 pesos, since at the beginning of the day it was at 4,087.83.
During the last months, the dollar had remained in a range between 4,500 and 4,400 pesos. However, in the last four weeks of June and to date, these values have been affected and the price has decreased notably, barely exceeding 4,100 pesos for several consecutive days.
It is relevant to take into account that if the price of the dollar continues to be so volatile, those in charge of importing food will be able to do it more economically, which would translate into lower prices in the market and would be a positive trend for the household economy. .
One of the reasons why the dollar has lost ground internationally has to do with the agreements in the United States related to debt limits. This has generated a confrontation between the powers of the North American nation, causing a political crisis in the country.
On the other hand, Felipe Campos, Investment and Strategy Manager at Alianza Valores, said that “to the good dynamics of the Colombian peso throughout the year is added the recent increase in the dollar worldwide. We were the only currency that ended lower. Investors have been making gains in Colombia in both TES and currency. And as we mentioned when Ocampo came out, they continue to take advantage of periods of internal panic to continue buying.
It should be noted that during the first two weeks of July, the international currency has shown its lowest values in the second half of the year due to the annual variation in inflation, which stood at 3 percent.
take advantage of the fall
Among the aspects to take advantage of with the downtrend is the payment of credit cards and traveling abroad.
Among the aspects that Huilenses will be able to take advantage of with the downward trend of the dollar, are the following:
Credit card payment: This is an opportunity to ease financial burdens, especially if some of those debts are denominated in dollars. It is important to remember that the recommendation is to use these cards as little as possible due to the high interest rates. Buying shares: Buying shares of companies is presented as an alternative for those adventurous investors who see low prices in companies that are not going through their prime. This strategy can provide long-term profitability. Traveling abroad: this is a good time to take advantage of a drop in the dollar, it can make your trips cheaper. With a favorable exchange rate, you will be able to get more for your money when you convert Colombian pesos to dollars and use them in your expenses abroad. Online shopping: Shopping online on international sites can become more affordable when there is a decline in the value of the dollar. You will be able to search for products that are cheaper in dollars and take advantage of the favorable exchange rate to obtain better prices when shopping online. New investments: If you are interested in investing in dollar-denominated assets, such as stocks or international bonds, a drop in the value of the dollar may make those assets more affordable in terms of cost. However, it is important to note that international investments also carry additional risks related to exchange rate fluctuations and economic conditions in other countries.
What falls in price
During the week ending July 14, the value of the dollar in Colombia experienced high volatility, oscillating between $4,200 and $4,100. This situation generated speculation about the possibility of the dollar reaching the $4,000 mark. The decrease in the value of this currency has had repercussions in the market, especially in the food sector, where reductions in the prices of some products have been observed.
One of the reasons that explain the drop in food prices is the downward trend in the dollar exchange rate in the country. The Minister of Finance, Ricardo Bonilla, has indicated that this decrease has influenced the costs of inputs used in food production, as well as imports of food products, which have become more accessible thanks to a favorable exchange rate. .
The proximity of the dollar to $4,000 has generated a reduction in the cost of food. Both the inputs used by producers in the national agricultural sector, which are purchased at lower prices, and imported food, which benefit from a more favorable exchange rate, have experienced a decrease in their prices. This situation has contributed to making it cheaper to purchase food products with a dollar close to this figure.
Regarding the issue, Leonardo Villar, manager of Banco de la República, has highlighted that the behavior of the dollar in Colombia continues to depend on external factors, which keeps it as a highly volatile variable. Therefore, it is necessary to closely monitor their behavior and be prepared for possible fluctuations in the future.
Therefore, Huilenses have been able to access products at lower prices, both domestic and imported. However, it is important to remember that the behavior of the dollar remains uncertain, and it is necessary to be attentive to changes in the exchange rate in order to make informed decisions in terms of consumption and production in the country.
gasoline and vehicles
Likewise, the price of gasoline in Colombia has experienced a decrease due to the fall in the value of the dollar in the country, moving away from the maximums reached in previous weeks.
According to the National Administrative Department of Statistics (DANE), imports of fuels and products from the extractive industries had a reduction of 38.8% compared to April 2022, reaching US $471.3 million.
Within this context, the product that contributed the most to this decrease was oil, as well as products derived from it and other related products, which experienced a reduction of 41.6%. This trend reflects the influence of the exchange rate on fuel prices and its impact on the national economy.
In addition, a decrease of 26.7% was observed in imports in value of machinery and transport equipment, which represented a significant reduction of 11.5 percentage points in the variation of the group. This drop in imports of machinery and equipment has had a significant impact on the sector.
One of the reasons that explain the drop in food prices is the downward trend in the dollar exchange rate in the country.
According to data from DANE, at that time the annual variation in the purchase price of a vehicle was around 20.94%. This downward trend is expected to continue throughout the year, considering the possibility that the value of the dollar in Colombia will reach $4,000 at some point.
This situation may be favorable for those interested in acquiring a new imported vehicle, since they could find better prices due to the decrease in the value of the dollar.