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HomeNightlifeColombian peso drops to new document low towards the greenback

Colombian peso drops to new document low towards the greenback


The greenback is at present buying and selling at 4.643 Colombian pesos (COP), above its all-time excessive of 4.627, reached in mid-July this 12 months after the Financial institution of the Republic raised rates of interest to curb inflation.

COP is among the many most depreciated Latin American currencies thus far this 12 months with 12.12% beneath the Argentine peso (31.14%).

The Brazilian actual has appreciated 6.97% this 12 months, the Mexican peso 2.01%, and the Peruvian sol 0.82%.

Colombian Peso. (Photo internet reproduction)
Colombian Peso. (Photograph web copy)

Within the final 5 days, the Colombian peso has depreciated by 2.43%, in a single month by 3.54%, in three months by 6.26%, and in six months by 19.23%.

The Board of Administrators of the Financial institution of the Republic voted to boost rates of interest to the very best stage in 14 years, reaching double digits for the primary time.

In a break up choice, a majority voted to boost intervention charges by 100 foundation factors, whereas the minority group voted for 50 foundation factors.

Colombia’s rates of interest had been raised to 10% from 9% to curb value will increase which have pushed inflation above the goal since 2021.

Administrators said that the financial system remained dynamic within the second quarter.

The technical group raised the GDP development forecast for 2022 from 6.9% to 7.8%.

Lastly, they famous a slowdown in productive exercise within the coming months.

The technical group revised its development forecast for 2023 from 1.1% to 0.7%.

Then again, Colombian inflation reached 11.44% year-on-year in September, primarily on account of meals.

This confirms that “Colombia is experiencing the strongest inflation shock thus far this century, and by the tip of this 12 months, annual value fluctuations can be within the higher vary of our situations,” in line with a report by Bancolombia’s Financial, Sector, and Market Analysis Directorate.

“As well as, there can be a better transmission of the depreciation of the change price to tradable items, which might be amplified given the excessive development that the financial system continues to be experiencing (…).”

“Together with the September outcomes and sustaining our month-to-month forecasts for the final quarter of 2022, inflation would finish this 12 months at 12%,” he mentioned.

Credicorp Capital estimates that inflation can be between 10.5% and 11.5% by the tip of the 12 months.

Sooner or later, the monetary holding firm mentioned, “the stability of dangers stays skewed to the upside, bearing in mind the attainable adjustment of the minimal wage, the tempo of public spending, and the evolution of rising gasoline costs.

We, due to this fact, keep our expectation for 2023 of 6.5%.”

 

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