ANDThe dollar had a maximum so far this year. The Representative Market Rate (TRM) was located at 4,023.26 pesos, exceeding the barrier of 4,000 pesos that had not been exceeded since December 6, 2023. Economists from different financial entities reviewed the reasons that led to this price and took stock of the sectors benefited by the currency.
According to the criteria of
As of today’s morning hours, the US currency was trading at an average price of 4,099.81 pesos, which represents a gain of 76.55 pesos compared to the official rate. In fact, at one point during the day, the dollar reached a maximum of 4,150 pesos.
According to specialists, there are several factors that determine fluctuations in the US currency: inflation and interest rate differentials, the national public debt, the terms of trade, economic growth, uncertainty and current account deficits – record of all Colombian transactions with the rest of the world; offers perspectives on how competitive the country is.
For Juan David Ballén, director of analysis and strategy at Casa de Bolsa, in this case, the rise in the dollar is due to inflationary factors: “The dollar today is strengthening throughout Latin America because inflation in the United States fell more than expected, which generates the expectation that the United States Federal Reserve (Fed) will cut the rate at least once before the close of this year.” anus”.
Photo:Sergio Acevedo
Along the same lines is Daniel Velandia, research director and chief economist at Credicorp Capital, who argues that the readjustment of monetary policy expectations in the North American country, and the uncertainty that this has generated, have led to a strengthening of the currency. .
But it also adds two elements that have had an effect on the currency. On the one hand, the “contagion effect” that was generated by the recent elections in Mexico and the majorities achieved in Congress by the elected president, Claudia Sheinbaum: “When the two largest economies in the region, such as Mexico and Brazil, have risk events and political uncertainty, there is a contagion effect.”since the markets are correlated and all Latin American currencies, including the Colombian one, have had a significant impact recently.”
The other point is the factor of domestic uncertainty, influenced by “the discussion of whether or not there will be constitutional changes and, in particular, the greater fiscal noise, have had an impact on the price of the dollar.”
“There is a concern about the fiscal issue. A few weeks ago the Minister of Finance raised the possibility of modifying the fiscal rule for next year. Likewise, the issue of the 20 billion cut, which is not necessarily written in stone, generates concern. It is expected that the medium-term fiscal framework, which will be published tomorrow, will clear up the doubts that exist“explained Andrés Langebaek, director of economic studies at Grupo Bolívar.
Who wins and who loses?
In this context, investments denominated in dollars are the ones that benefit the most, according to Ballén. Some examples of this type of asset are shares in multinational companies, precious metals or dollar bonds.
For his part, Velandia says that exporters are among the big winners of this rise in the dollar, but, particularly, those who export agricultural goods, because they do not need to import as many inputs from international markets, which economizes on their production. Coffee, bananas and flowers are some of the products that are strengthened under this paradigm. The oil sector also benefits from the strengthening of this currency due to “the higher value of oil in Colombian pesos.”
Imports.
Photo:Santiago Saldarriaga. EL TIEMPO Archive
On the contrary, the importing sector tends to be more affected because costs increase, especially the industry, which has been affected for some time.
For César Pabón, executive director of Economic Research at Corficolombiana, Consumers would also be hit by an increase in the price of household appliances, cell phones and other everyday items.
In fact, analysts highlight that there is a risk because, if the dollar remains very high for a long time, inflationary pressures could be generated that would mainly affect lower-income households and could prevent the Bank of the Republic from continuing with the decrease. of interest rates.
“Imported products, which weigh about 15 percent of the basic basket, begin to increase their prices, and this, naturally, can have effects on inflation,” said Pabón.
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However, this is offset by those who receive remittances, which, according to Velandia, are almost 3 percent of GDP. These benefit from an increase in the valuation of transfers that makes them receive much more in the local currency.
Investing in this context depends on several factors; It is necessary to take into account the risk profile, the amount of assets, economic conditions, among other factors. But, in general, analysts insist that it is advisable, for those who can do so, to have assets in dollars to generate diversification.
“Having assets in dollars is an excellent source of diversification. All portfolios, to the extent possible, should have assets tied to the dollar to diversify currencies and to have less exposure to local risk”Velandia said.
Langebaek thinks in the same way, who says “that in savings portfolios there are options that always allow combining local assets with foreign assets and that is an appropriate practice.”
Finally, for Pabón, the increase in the dollar can be an opportunity to bring extraordinary income to Colombia, since the country becomes more attractive for international investors and tourists, to the extent that, for them, it is more economical to spend on Colombia.
JUAN ANDRÉS BELTRAN TÉLLEZ – Economy and Business Editorial
