Although international factors are linked to high inflation in most countries, the decisions on interest rates that the Federal Reserve in the United States began to adopt and the war in Ukraine spawned The increase in the dollarCompared with all the currencies of the world, Colombian analysts do not exclude that in the midst of such volatility, a speculative attack against the peso is also created.
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Yesterday, the dollar opened its operations in the Colombian banking market at 4,590 dollars and reached It rises to a high of $4,663. It closed at $4,625 and the average was $4,627.73 in a market where $1,429 million was traded.
In this way, this Wednesday, the Financial Supervisory Authority approved a price Market Representative (official) $4,627.46, This is $114.18 above the price that was in effect yesterday.
This year, the Colombian peso depreciated by 16.23% against the dollar and more recently 12 month 20.84%.
For this reason, given the depreciation of the peso, which has increased in the last 12 days, analysts are of the opinion that Banco de la República may take some action, and not necessarily sell (burn) international reserves as in the past.
For foreign exchange analyst Diego Rodriguez, Banco de la República “can and should act” because of all this that has been going on.
Considered that the Colombian market showed a Lack of depth and fluidity In the formation of prices, “therefore it was affected by the big moves of international and local speculators and the market did not find any obstacles. Thus, since there is no counterweight, the dollar price goes up and up.”
Analyst warns that Banco de la República and other central banks must step out and act in the face of the attack so that the real sector can Make decisions calmly.
“If the Colombian exporter goes out to work, it will encourage profit-taking by those who have taken a position and it will calm the market because there is an overreaction,” the expert analyzes.
He points out a sensitive factor because with such a large increase “inflation expectations have been so grounded, that an importer or someone who has to work with an imported component will bid a minimum of $5,000 USD because they need to cover a purchase. This is how we earn.” massive inflation.
For this reason, he says, “we must stop this attack, which is an international move, but has a speculative element and suggests that the action could be the sale of non-delivery NDF futures, which only recognize spreads at maturity and which the bank has already used efficiently.”
Arnoldo Casas, Director of Investments at Credicorp Capital Asset Management, confirms that another mechanism “for the Bank of the Republic’s work that has not been used for a long time has to do with volatility control options. The revitalization criterion is already in place. It consists that the 20-day moving average of the dollar must That deviates by 3%.”
Casas is considered to be the Colombian source We are not going out to sell dollars “Well, it’s a bad message for the market and the speculative effect has already happened in the past, because no one is bigger than the market.”
In addition, the report reveals that the Ministry of Finance has invested only $37 million this year.
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Another option is to raise interest rates more aggressively, and even review the overall leverage position of the banks, that is, to limit the dollar holdings of these entities.
Holman Rodriguez Martinez