Is it possible for the dollar to reach 5000? This is what the experts say | Finance | Economie

A few hours after the announcement of Gustavo Petro’s victory as the next president of Colombia, some media and users on social networking sites speculated that the price of the dollar would rise. Up to 5000 pesos.

(Read: Dollar: What historical highs are due and what’s next for the currency).

In recent weeks, the foreign currency has recorded a significant appreciation in its price, which has put it in a good position over 4300 pesos. However, experts agree that this is due to international and domestic factors, and they are not directly related to the current political situation in the country.

Juan Eduardo Netes, senior foreign exchange assistant at Credicorp Capital, stresses that there is a possibility that the dollar will reach 5,000 pesos if some of the factors that lead to the devaluation of the Colombian peso continue to deteriorate.

One of these is the rise inflation in the United States and Europe, This indicates high expectations that interest rates will continue to increase and thus have an impact on the currencies.

It also guarantees that:In Colombia, despite the fact that we have achieved very good financial results since last year, the lowering of the fiscal deficit is threatened by the strengthening of the dollar. With the price of oil dropping.

For NETs, ​​the US is trying to control inflation by raising interest rates and generating an expectation that there will be no demand for basic commodities, such as “goods”, to a possible recession. This means that the price of oil is falling and, in the case of Colombia, it translates into lower income, a larger current account deficit, and a larger fiscal deficit due to the country’s external debt.

In Colombia, the next step is to raise interest rates more aggressively. Now we are less competitive in interest rates than countries like Chile and BrazilNate says.

On the other hand, Jeisson Balaguera, CEO of Values ​​AAA, says that the representative market rate (TRM) is witnessing a significant change in Colombian Stock Exchange Because there is a huge demand for dollars.

“A lot of pesos are being converted into dollars and they are taking refuge in countries like the United States, because despite the high interest rates, there is a much more stable political landscape than the one in Colombia,” Balaguerra notes.

Who benefits or harms?

The rise in the price of the dollar has the ability to affect the prices of imported goods, which affects their prices today About 15% in the family basket Colombians. Likewise, it could affect the construction sector, according to Herman Davila, a professor in the School of Business, Management and Sustainability at Grancolombiano Polytechnic.

A higher dollar means more tax collection associated with imports. This, of course, represents higher revenue for the state, but, in turn, these high-cost imports can be transferred to consumers, as in the case of imported cars, which will certainly rise in prices, affecting the consumption of those families who desire it. to buy vehiclesDavila explains.

The other victim will be foreign investment, As the uncertainty about this scenario makes foreign companies cautious when investing in the country, which affects job generation in Colombia. To the extent there is no foreign investment, Davila says, there will be no tax collection and income for the Colombian state.

For Balaguerra, the higher-priced dollar benefits the exporting companies, as they get income in dollars and increase Your purchasing power in pesos. Similarly, for those who earn in dollars or euros and have expenses in Colombian pesos.

Nets asserts that the dollar’s rise will be reflected in the rise in the prices of imported products and local foods, “as the animals we use are fed with imported grains, and foodstuffs and vegetables are fumigated and treated with imported fertilizers.” .

(Also: the supported system suggests but does not eliminate EPS improvements).

Balagueira points out that “by paying a higher price for these inputs, their final price will also rise and it will have an effect on inflation.”

There will be consequences for the state in financial obligations, Specifically when paying off debt and interest in dollars.


Leave a Comment