The price of the dollar could experience further reductions due to the increase in remittances.
Photo: Bloomberg – Paul Yeung
The dollar began its price on Friday lower, registering $3,865. This translates into a slight drop of $3 compared to Thursday’s close, as well as a change of 0.07%.
The Representative market rate (TRM) remains at $3,857.58.
It is expected that in the coming days the currency will move on relatively stable grounds, since for analysts the main variable continues to be the interest rates set by the Fed.
It must be remembered that these have been maintained in the last meetings, and it is expected that the first reductions will not be seen until September or August (some even believe that these would not be registered until 2025), since inflation has not slowed down as expected. I would like in the United States.
Interest rates have an influence on the price of the dollar to the extent that the lower they are, the more investment is stimulated in countries such as Colombiawhich in turn translates into more greenbacks circulating in the national territory and, therefore, a cheaper currency.
However, there are other variables that have their weight on the dollar. There are exports that, in recent months, have consolidated a downward trend that still shows no signs of recovery. The country’s external sales have deteriorated, mainly due to the reduction in shipments of oil and products from the extractive industries.
Read also: Dollar in Colombia: this is how the currency could behave in the coming days
But there are also the remittances that arrive in Colombia, which compensate a little by continuing a path of growth. An analysis published by Banco Unión indicates that May is expected to close with a 15% increase in this matter, mainly due to the celebration of Mother’s Day.
“About 500,000 Colombians left the country in 2023, setting the United States and Spain as their main destinations. As a result, these two places have become the places from which the highest number of remittances to Colombia come, led by the North American country with 53% and followed by Spain with 13%. The other countries that complete the top 5, as the largest recipients of International Money Transfers to our country, are Chile (4%), the United Kingdom (4%) and Ecuador (3%). For their part, the main departments receiving remittances are Valle del Cauca (26%), Cundinamarca (16%), Antioquia (16%) and Risaralda (5%),” he points out in his report.
Finally, there is the evolution that the conflict may have in Middle East, since an eventual escalation of the conflict would increase the appetite for the currency as a safe haven asset. This would imply an increase in demand and, therefore, a scarcer and more expensive greenback.
The performance of these, and other variables (such as international investment), cause the price of the dollar in Colombia to fluctuate. At the moment the main projections point to it continuing to move around the thresholds of $3,800 and $3,900.
