In a significant turn for the Colombian financial system, Mario Pardo, president of the Board of Directors of the Association of Banking and Financial Entities of Colombia (Asobancaria) and president of BBVA Colombia, presented the proposal to allow the opening of accounts in dollars and other currencies from the national territory. The idea was presented during the 58th Banking Convention 2024, organized by the union in Cartagena.
The main objective of the proposal is to counteract the problem of the low level of savings among Colombians. The leader highlighted that allowing the opening of dollar accounts in Colombia could be a vital solution to retain a significant part of the formal savings that is currently destined abroad.
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In the intervention, he explained that this would alleviate the fact that hundreds of billions of pesos are in products outside of Colombia. This savings, If it were invested to a greater extent at the local level, it could generate an increase in deposits, investment and the Gross Domestic Product (GDP), which, in turn, would boost the social development of the country.
Pardo provided specific figures to support his proposal, indicating that at the end of 2023 Colombians had USD256 billion in assets abroad. The amount represented approximately $1,000 billion, equivalent to 72% of GDPat 40% of stocks of investment in Colombia or 160% of the deposits of the national financial system. According to the manager, this capital could have a positive impact if it remained and invested within the country.
He also addressed other factors that contribute to the low level of savings in Colombia. Among these, he mentioned the impossibility of opening dollar accounts in the country and a regulation that favored the stability of institutional investments abroad to the detriment of internal growth. “This is seen both in the savings of individuals, as well as of companies and in the savings managed by public and private institutions,” Pardo pointed out.
Finally, the president of the Board of Directors of Asobancaria and BBVA Colombia argued that If the savings transferred abroad were used in national projects, a significant improvement would be observed in various economic indicators.
“If this savings, instead of leaving the country, were invested to a greater extent in Colombia, we would have many more deposits, much more investment, much more GDP and greater social development,” concluded Mario Pardo.
Several financial entities in Colombia, including Bancolombia, Banco de Bogotá, Davivienda, Banco Itaú, BBVA Colombia, Scotiabank Colpatria and Citibank, already allow Colombian citizens to deposit their savings in dollars, with the expectation of generating future benefits. These accounts seek to offer an alternative in the face of growing economic uncertainty.
These institutions offer specific conditions and requirements for opening accounts in dollars, which include an initial amount that varies between USD5,000 ($19,721,000) and USD25,000 ($98,605,000), as published in various media. Similar to local savings accounts, these accounts typically require a minimum average monthly balance to avoid the handling fee, which in some cases can exceed USD500 ($1,972,100).
Despite the opportunities these accounts represent, the yield offered is low, with average interest rates around 0.01%. In addition, savings in these accounts are subject to fluctuations in the exchange rate between the US dollar and the Colombian peso, which could result in gains or losses depending on economic behavior, according to sources.
With the intention of attracting investors seeking to protect themselves from peso volatility, these banks have designed products that require careful analysis by users to evaluate the possible benefits against the risks involved.
According to the fintech Global66, there are several factors to consider when saving in dollars in Colombia.
First, you should be careful with fees and commissions. This includes the following:
- Before deciding to save dollars, it is crucial Take into account associated fees and commissions.
- These costs may vary depending on the savings method chosen. For example, if you decide to open a dollar savings account at a bank, you may have to pay fees for account maintenance, transactions, and withdrawals.
