The US Dollar Vs. The Colombian Peso ............. Who's Up? Who's Down?

Meh.  Never feel bad about missing a 'deal' or losing something you never had.

The high rates might be good for those of us that can afford them, and helps stem inflation.  But it makes borrowing money more difficult for the locals.

Just spoke with a friend and her boss.  We have several CDTs with their company at a high rates.

They said foreign money investment/ingress was stationary the last 2 years.  They said it is being pulled out rapidly in the last few months for fear of Petro's proposals finally being worked on in Congress.

They didn't have any investment recommendations at this time as some of our CDTs are coming due.  Guess we'll wait and see.

its all about the Fed, If recession hits US rates could fall everywhere, but if inflation is sticky and rates remain high, the dollar may soar again, nobody knows

Channelling below 4000 Pesos.

The value of the U.S. Dollar has been channeling

in a tight range below 4000 Colombian Pesos.

In the week just ended December 15, the

exchange closed with the Dollar valued at

3944 Pesos.

That is a loss in the Dollar's value of 17.7 percent

versus Colombian currency compared to a year ago.

Source... xe.com USD-COP charting

@mtbe ... Petro's proposals are not just "being worked on" ... they were debated for four months and are now moving forward for the change Petro promised.

After 4 months of debates the Congress voted to move forward Petro's proposals for health reform, labor reform, education reform and pension reform. Congress supported Petro by a majority of votes that came from the Partido Liberal, Partido de la U, the Pacto Histórico, the Partido Comunes, the Partido Verde, etc.

Petro is not a dictator imposing his reforms. He is fostering debate and taking into account the proposals of all the parties, including proposals of the conservative parties. He has met with Uribe several times. The congressional vote to move forward with reforms was democratic and legal, with a majority supporting Petro's reforms.

I guess all those who said Petro was a communist and that Congress would "stop Petro" were wrong.

Many political parties in Congress are working with Petro. It is not scary. Not politically. Not economically. In fact the Colombian Peso has remained strong and stable against the USD in the 16 months of the Petro administration. Petro is a capitalist who has respected all the contracts made by the previous administrations.

Before Petro was elected, the right wing spread disinformation, in alarmist language, that Colombia would become Venezuela with centrist Petro as president. Wrong again.

The most common phrase in Colombia now - heard literally everywhere - is crowds of people chanting "¡Fuera Petro!"...you can search the internet for that and see...

    The most common phrase in Colombia now - heard literally everywhere - is crowds of people chanting "¡Fuera Petro!"...you can search the internet for that and see...        -@OsageArcher

So what? No, seriously... so what? Is there ever a time in history where some percentage of the population was NOT calling for the removal of their democratically-elected, non-dictator, non-evil, actually quite reasonable/decent leader? That's been happening throughout recorded history, and it won't stop anytime soon. Political leaders, by definition, cannot please everyone. It's impossible.

Colombia especially is quite fragmented regionally. We can't even get Paisas to stop talking sh!t about Costeños, and vice-versa. Heck, same thing with North England vs. London folks. Same with (pick any tribe) and (pick any other tribe) in my beloved Nigeria. How about the famous old-school Tutsi vs. Hutu conflicts in Rwanda?

Point is, almost no country is TRULY unified or happy under any given leader. Not even under "benevolent dictatorships" like China. Heck, I am sure some Japanese citizens are unhappy with President Shinzo Abe (even while they enjoy living in one of the objectively safest, most tech-advanced countries on Earth).

Do we expect Colombia to be any different?

I think the fact that former-guerrila-turned-political-peacemaker Petro turned out to NOT be a myopic and openly corrupt piece of sh💩 after all, pisses off many of his detractors. They desperately wanted (and still want) him to fail, no matter how he tries to steer the country onto a better path.

If you read anything about political histories around the world, does that not sound familiar?

Just sayin'.

@ChineduOpara. The Fuera Petro chant is unprecedented.  It's heard in fútbol stadiums, on the streets, in buses, it starts spontaneously almost everywhere.  It was never done for any previous Presidents.

I have followed Colombia politics and everyday life  since 1996.  My Colombian family also agrees that this is not a "so what?" thing as you seem to think.

@OsageArcher It seems like the Colombian version of "Let's go Brandon!" to me. I could care less; but, not by much. Typical Latin American politics. Not any better or worse than what we have in the USA.

regards,

lpd

As far as the economy affecting "the locals" here is a fact: Inflation has been coming down in Colombia for 8 consecutive months, even after taking into account the tax on ultraprocessed foods, even after taking into account gasoline prices and other factors. The decline in inflation favors all Colombians regardless of their political leanings.

International financial conditions are favorable and the international financial folks are not nattering nabobs of negativism when it comes to Colombia. The Colombian Peso is strong and stable. That is appreciated internationally.

All of these factors also provide ease of mind for ordinary Colombians ("the locals") who are making economic decisions in Colombia.

Things are so good with the Colombian economy that Leonardo Villar, the head of Banco de la República, decided to cut 25 basis points off interest rates (from 13.25% to 13%) which will have the effect of lowering inflation even more, benefiting ordinary working Colombians in their economic lives, especially those Colombians who have no money to buy CDTs.

The importance of the strong Colombian peso in the USD-COP exchange rate is undeniable.

    @ChineduOpara. The Fuera Petro chant is unprecedented.  It's heard in fútbol stadiums, on the streets, in buses, it starts spontaneously almost everywhere.  It was never done for any previous Presidents.I have followed Colombia politics and everyday life  since 1996.  My Colombian family also agrees that this is not a "so what?" thing as you seem to think.        -@OsageArcher

Those spontaneous chants you mentioned, I am quite sure part of it is due to "group think"... to wit: "Other people in my In-Group/tribe is chanting, I don't want to be left out, so I'll join in" mentality. It happens more often than you might think, this Tribal Allegiance stuff is literally an evolutionary quirk/adaptation - Human Psychology can be creepy and weird especially when you start looking at entire crowds of people when it comes to religion and politics, or in times of massive natural disasters.

OOOORRRR.... or maybe you're 100% right and Petro is up to some nefarious stuff, which will be eventually exposed, tearing his presidency apart for LEGITIMATE reasons.

For now, however, all this anti-Petro sentiment is based on layperson opinions and speculations based on vague "feelings" and some of his history as a fighter.

We'll see, I guess. We expats are merely guests and observers 😅

What a bunch of hog wash, hehehe which Colombians are you speaking to? Cut the rate from 13.25% to 13.0% and this is your proof? wow

Even my once strong supporter of Petro, my best mid aged Colombian paisa friend who lives high in the Estrato 2 shacks above Manrique, who earn 33,000 pesos a day on his construction job which is a high risk as he is a roofer strapped in a harness replacing and repairing the roofs of the Medellin metro stations.........well he now bows his head in shame when we speak about Petro, hehehehe

Not to be overshadowed by my 34 years of travel in Colombia and living 10 years in Medellin, I am out and about daily in Medellin when I am not traveling everywhere in the country..............he and his clan are socialists, even my left leaning paisa buddy can see through the BS.

"Ease of mind" for the ordinary Colombian people.........seriously.........I daily interact with hundreds and have had a million interactions in the past 34 years in Colombia and the normal/ordinary Colombian, which represent 95% or more of the population are living paycheck to paycheck if they are fortunate enough to have a job.

As always I keep it real.

Happy Holidays to everyone!

For now, however, all this anti-Petro sentiment is based on layperson opinions and speculations based on vague "feelings" and some of his history as a fighter.    -@ChineduOpara

It's based on a lot more than that - people are living the nightmare.  You could read news reports of how people are suffering due to higher prices.  Many irregularities have come to light in Petro's campaign funding.   They see what Petro is spending money on - frivolous useless stuff and luxuries for his coterie.  Ask people what they think about the helicopter trips of his VP Márquez.  Of course "feelings" play a part, when things like gas have gone up from 8,000 to over 17,000...and because of that prices of everything that comes by truck have gone up across the board.

As far as his history as a "fighter" - he was a member of guerilla forces that kidnapped tortured and killed people - their friends, their relatives and family members.  I guess many people have some vague "feelings" about that.

You need to read the news and talk to the people.  Ask them what they think about Petro's "gestores de paz" for one thing...

@OsageArcher I have talked to people and I have read the news. Yes I know of all those things you said. However, can it all be put at the feet of Petro? Does any well-read person really think the President controls the economy in a Free-Market Economy of a [technically] Democratic country? Does any sane person think that President Bola Ahmed Tinubu really controls the price of grain in Nigeria, or that President Biden controls the price of gasoline in the dUSA?

My point is, these economic woes are not new, they have been around, and they are caused by a complex web of factors. We can point the finger at literally any major country on Earth, and their activities are contributing to the local Colombian's financial woes, just like they are contributing to the average local Nigerian's lack of economic stability.

I mean, I totally understand peoples' frustrations, but I strongly believe that even if it wasn't Petro, it'd be someone else. Elect another President who will appease the currently unhappy people? Another group will get upset. Elect a literal housecat to the Presidency? It wouldn't change the global web of complex geopolitical and macroeconomic dynamics - as well as the local/internal Colombian culture and mindset - that affect local prices.

As a guest, I have no skin in the game (aside from enjoying the 11.5% rates on CDTs, heheh). President Petro is far from perfect, and he may well be exposed (eventually) to be a Bad Actor and Bad For The Country. But he's just a symptom, not THE problem, you feel me? No leader can please all citizens. An angry, hungry (hangry 😅) and largely-uneducated population always seeks a simple and easy target - be it their fellow citizens (those of another "tribe"), the President (basically a figurehead), or usually both.

"people are living the nightmare"

Yes, let's keep it real. The parking lots at shopping centers are so full people have trouble finding a parking spot, people have to wait in lines to get into Crepes and Waffles, and so many people own cars (and taxis and motorcycles) traffic is a nightmare in many cities. How is this possible if "95% or more of the population are living paycheck to paycheck"? Asking for a socialist friend... Happy holidays everyone!

...The parking lots at shopping centers are so full people have trouble finding a parking spot, people have to wait in lines to get into Crepes and Waffles, and so many people own cars (and taxis and motorcycles) traffic is a nightmare in many cities. How is this possible if "95% or more of the population are living paycheck to paycheck"?
   

    -@futuroexpat

You know, I've been asking myself the same question. Both here and back when I was in the USA. How can people say they are "living paycheck to paycheck" and "really struggling, I tellz ya!"... when all of what FuturoExpat said is happening, $500 video game consoles are flying off the shelves, and some kids are wearing $250 sneakers to go play in the park? My local malls - both upscale and budget-friendly - here in Barranquilla are CHOCK FULL of people wearing really nice clothes and shopping like crazy.

Something isn't adding up.

@ChineduOpara It's called credit and it is at an exorbitant rate. One pair of $200 dollar jeans may be the entire wardrobe and the jeans may be shared between family members as well. I can promise you that the majority of locals in Colombia are hurting and hurting bad. Of course a lot of expats not so much so.

regards,

elp

I live in estrato 2.

I guarantee that 98% of the people who live here have never been to the two closest malls.  Most of them don't make it to the closest large city 30 minutes away each month to even think about going to a mall.  So using the 'parking lot at the mall is full' to demonstrate the growing economy (especially during holiday season) is a red herring.

Also, look how few bags are being carried around in the malls.  I've helped my niece sell items at malls during art fairs.  Many people just walking around in the A/C, not buying anything.  Maybe an ice cream or a treat, but we've sat outside several stores for full days and nobody left those stores with anything in their hands.

A better indicator is the street shop/store/tienda/restaurant.  How many have you seen open, only to be closed a year, or a few months, later?

Trying to use empirical evidence of a mall parking lot where, in Colombia, the upper-middle to upper class may visit, to infer the economy is booming, only indicates the ones doing the inferring only visit malls.

What we do notice is more of our neighbors asking for work...or 'una presta'.  They are feeling the pinch of the higher prices and are getting desperate.

Inflation presented by the govenment is shown as decreasing.  But what about the CORE inflation, a measurement most economist point to as being a better indicator?  In the US, the CORE inflation is still 2% higher than what the govenment posts.  What is the CORE inflation of Colombia?

@Lpdiver says "It's called credit..."

mbte says: "I guarantee that 98% of the people who live here have never been to the two closest malls."

Since allegedly 98% of Colombians (according to sources on this forum) are living an economic nightmare, it is no surprise that a decreasing number of Colombians even have credit cards, and no surprise that an increasing number of Colombians are cancelling their credit cards. This according to a 2023 report from the Superintendencia Financiera de Colombia that says between January and July of 2023 there was a decrease of 577,127 active credit cards in the major banks in Colombia.

Besides, since those reputed 98% of Colombians are so poor they don't visit malls, they would logically not qualify for a credit card... because you have to have money, you have to have a bank account, you have to be of age, you have to demonstrate a responsible use of credit (i.e., have a credit history), you have to have a job and prove your income with pay stubs ("colillas de pago"). Those 98% of Colombians trapped in a "nightmare" (according to some on this forum) would not even qualify to get a credit card.

It is just not logical to say "98%" of Colombians are so poor they can't afford to buy in malls, and then turn around and say they buy in malls with credit cards that they do not even qualify to get from a bank.

@futuroexpat

You're making a strawman argument.  After reading some of your other posts, it seems most are strawman arguments.

Read mtbe's post again.  He's (or She's) referring to his neighbors in estrato 2, not 98% of Colombians.  He never mentions 'economic nightmare'.  It's you, using a strawman argument, that makes the superficial comparison.

Reduction of the number of credit cards may point to several things, of which we won't know unless we read the full report, and many times, the report doesn't indicate reasons why.  It just shows hard numbers.  Perhaps it's because people are feeling the pinch of the Petro Administration's policies, eh?  Who knows?

Kudos to GuyB for fact-checking a post that may have

overstated poverty levels in Colombia.

--

We remind members that this is a currency thread

comparing USA Dollars and Colombian Pësos.

Please discuss mall attendance, poverty rates

and other matters that may be off-topic .. on

more relevant threads .. unless you directly tie

commentary to the USA-COL exchange rates.

cccmedia, designated Expat.com Colombia expert

@cccmedia ... Thank you for keeping us on track. I  presented some hard data on Banco de la República lowering interest rates. A strong COP is the sign of a well-managed economy. When the COP is strong, it reflects good management and results in a robust Colombian economy. It means inflation is decreasing. It means Banco de la República feels confident enough in the Colombian economy to decrease interest rates, and it means tax policies that encourage companies to bring back profits from abroad.

I suggested a strong COP was related to positive economic growth under Petro, interest rate decreases by Banco de la República, tax policies that favor "los de la ruana" (the poorest Colombians) through decreasing inflation. Needless to say I got a little pushback... LOL!

As we are closing the year of 2023, perhaps now would be a good time to go back and review the USD COP exchange rate predictions of the financial experts (Fitch, Bloomberg, etc.) who on July 1, 2023, when COP was at 4168, were in consensus that the USD would gain against COP by Dec. 31, 2023 and end the year at COP4,600 to 1USD.

Well, we are eight days away from Dec. 31 and today the COP USD rate is 3899 as of Dec 22, 7:26 PM UTC. Instead of USD gaining value against COP the USD has lost even more value.  16 months of month to month consistent USD devaluation seems more than a "blip" to me.

This is not a subjective assessment. This is mathematics. According to forex to calculate the percent change of depreciation of a currency, subtract the currency's current value from its earlier value, then divide that figure by the current value. Multiply this figure by 100 to get a negative percentage, which is the depreciation to that point.

When ccmedia started this thread on November 4, 2022, the exchange rate was 5092 Pesos to the Dollar. Today it is 3899. So applying the forex formula for currency devaluation we get 5092 minus 3899 divided by 3899 multiplied by 100.

The result is a 30.6% decrease in the value of the USD compared to COP.

Invest in Colombia. Keep money in COP, unless you like losing 30.6% value (USD to COP) in one year.

It is nice to cherry pick dates to prove one's point. Of course, other folks can cherry pick their own dates. Take a look at the long-term trend and tell me... Where do you think the exchange rate will be in five years? In 1990 the peso was around 500 pesos to the dollar, today at 3900ish. Now if you are day trading COPS to PESOS that is another thing. It is not impossible to catch a dropping knife; but there is inherent risk.

Regards,

elp

Actually your math is wrong - or the way you state it is.  It's not a 30.6% decrease in the value of the USD - but it is a 30.6% appreciation for the COP relative to the USD.

Relative to the COP, the USD depreciated 23.4% - not 30.6%.  But this is over a period of only a year, and it most certainly is not long-term like a period of 20 years is.  Over a longer period like that, the USD has appreciated more than 100% with respect to the COP.  Surely I am not the only one who remembers when it was 1 USD = 1800 COP around the turn of the century...

The other question in my mind in regards to dollar/peso rates is how it affect me as a US citizen with US income desiring to live in Colombia. So my social security check will increase by 3.2 percent next month, my investments over the last year looks like it will be in the low 13% increase. So couple that with the lower COP exchange rate and Colombian inflation rates... just how bad a hit does it actually equate to ? So if wanting to transfer monies to Colombia to live on over the course of next year is it better to send the money now or later next year.

Regards,

elp

@OsageArcher ... Would you mind sharing the currency depreciation formula you used to arrive at 23.4% instead of 30.6% ?

If I am in error I don't want to repeat the same mistake.

P.S. Regarding your reference to "long-term" depreciation/appreciation... as John Maynard Keynes famously said: In the long term we are all dead.

@Lpdiver ... I used the date the thread began and today's date. Neither one is "cherry-picked" ... The first date was chosen by ccmedia,  not by me. Today's date is today's date, the date that has to be chosen to determine devaluation of the US Dollar effective today. I could have gone back arbitrarily and "cherry-picked" a better date. The COP/USD rate today was not jerry rigged by me. As they say, it is what it is.

If I had arbitrarily chosen any other intermediary dates to make my case stronger, then your claim of cherry picking would be valid. But I accepted the reality of the beginning date (when ccmedia started the thread) and the ending date which is today's COP/USD exchange rate.

So what do you come up with using 500 pesos to todays rate?

lpd

@futuroexpat So what numbers to you arrive at if you use 500 pesos/USdollar compared to todays rates?

regards, elp

    @OsageArcher ... Would you mind sharing the currency depreciation formula you used to arrive at 23.4% instead of 30.6% ?
If I am in error I don't want to repeat the same mistake.

P.S. Regarding your reference to "long-term" depreciation/appreciation... as John Maynard Keynes famously said: In the long term we are all dead. -@futuroexpat

Think of it this way, using the numbers 5 and 4.

In each case up or down they differ by 1 and that doesn't change.

4 to 5 is a 25% increase.  But from 5 to 4 is only a 20% decrease.

The USD depreciated relative to the COP from about 5200 to 3900 or so.  That's the 23% depreciation.  But with those same numbers, the COP appreciated the 30%.

    Kudos to GuyB for fact-checking a post that may have
overstated poverty levels in Colombia.
--

We remind members that this is a currency thread
comparing USA Dollars and Colombian Pësos.
Please discuss mall attendance, poverty rates
and other matters that may be off-topic .. on
more relevant threads unless you directly tie
commentary to the USA-COL exchange rates.

cccmedia, designated Expat.com Colombia expert
   

    -@cccmedia

Yes: It's difficult to have discussions on the direction of USD - COP without talking about causes and effects, Politics, propaganda, financial news sources and empirical data.

2023 Finale.

The year ends with the U.S. Dollar pegged at 3877 Pesos.

That's down 19 percent versus Colombian currency

compared to December 31, 2022.

Source.... xe.com USD-COP charting

    2023 Finale.
The year ends with the U.S. Dollar pegged at 3877 Pesos.

That's down 19 percent versus Colombian currency
compared to December 31, 2022.


Source.... xe.com USD-COP charting
   

    -@cccmedia

"pegged". heheh 😁

Of 140 currencies in the world in 2023 the COP has been strongest against the USD. The appreciation of the Colombian peso against the USD contributed to generating less pressure on imported products that are part of the family basket ("canasta familiar").

Since last March the Consumer Price Index has been registering decreases in the costs of basic foods. This benefits the poorest Colombians, or anyone who eats foods in the "canasta familiar" for that matter. This is good news for the majority of everyday Colombians who live in Petro's Colombia.

@futuroexpat Everything you state may be true; however, all of the Colombian's that I am related to are complaining about the increased cost of living. Of course, they are not living on dollars.

lpd

Dollar bouncing back toward 4000.

The U.S. Dollar is up 100 Colombian Pesos

from its late-December swoon whose nadir

was recorded on the 28th.  The Dollar has

spent virtually the entire past 30 days below

the 4000-Pesos  benchmark.

Heading into the last day of 2024's initial week,

the Dollar is valued at 3933 Pesos, according

to xe.com's USD-COP charting.

Dollar defies a trend.

The U.S. Dollar has been defying a clear trend

since Christmas.

Compared to the Colombian Peso, the Dollar was down

slightly this past week ending today, January 12,

and concluded the week valued at 3913 Pesos.

Source.... xe.com USD-COP charting

A narrow range.

The U.S. Dollar has been channeling in a

narrow range since Christmas week as compared

to the Colombian Peso.

The Dollar closed the week of January 19, 2024,

at 3913 Pesos to the greenback.

Source... xe.com USD-COP charting

And to think that my first visit to Colombia was a 4 month stay in Bogota in the winter of 1990 and I recall the exchange rate from USD to COP was like 600.

I am happy as a clam regardless of the rate fluctuations, here 7 almost 8 years ago purchased cash my then new 3bd/2bh apartment 45 minutes outside Medellin in a pueblo, what a great choice I made but at the time as I recall the exchange was somewhere in the neighborhood of 2,200 COP to the USD, paid cash and never looked back.