Dollar down, is it better to buy or wait for more falls?

Dollar down, is it better to buy or wait for more falls?

Faced with a new fall in the price of the dollar in Colombia and which led to the official currency today at $4,692.04, that is, $297 below last January 6many people are already wondering if it is a good time to buy the green ticket.

(Read: Markets are optimistic about lower inflation in the United States).

Although there is no consensus among analysts, as some consider that the dollar will continue to fall in the coming days, while others say that it would stabilize and it could register small increases, the truth is that compared to the levels that it registered above $5,000 in November of last year and reached around the beginning of 2023, there are reasons to accumulate the currency.

Ana Vera, chief economist at In On Capital, said that the outlook for 2023 is interesting and full of opportunities at a global level, “So if you want to have access to other products abroad, it may be a good idea to have dollars. In addition, there is a lot of expectation about a possible recession and what the evidence shows us is that when there is a recession in the United States, the dollar it appreciates against most of the world’s currencies, which implies that more pesos have to be given per dollar”.

In any case, says the analyst, everything will depend on how strong the deceleration of the economies is, foror that the ideal is not only to buy dollars but there are other currencies that are recovering such as the euro and allow diversifying risks.

(In addition: Colombian peso: the one that falls the most against the dollar at the beginning of 2023).

On the other hand, at the local level, Ecopetrol is expected to continue leading the inflow of dollars, even with the recent issuance of international bonds (for US$2,000 million) it will have several dollars to bring into the country.

The issues of reforms and politics do make some noise to the currency, especially since some imply that companies can be less competitive and they cannot export to bring dollars, in addition, says the analyst, “it will depend a lot on the rate decision of the Bank of the Republic since inflation is high and in order to be competitive globally Colombia must send messages that it is capable of controlling inflation .

The operation dollar daily opened yesterday at $4,708 and closed at $4,675.60 with a traded amount of US$1,622 million, one of the highest in the last year.

Thus, the devaluation of the peso against the dollar is 2.45% so far this year.
For the financial and exchange analyst Diego Rodríguez, after the dollar broke the floor of $4,700 and with the inflation data, the currency is likely to correct further, ie record new lows.

(Keep reading: Which countries are better to travel with Colombian pesos in 2023?).

According to the Financial Plan presented by the Minister of Finance, José Antonio Ocampo, the dollar in Colombia is expected to stabilize around $4,758 in the coming months, so with the current price it would seem to be a good time to acquire dollars. In any case, the market will be awaiting the decisions on interest rates adopted by the Banco de la República at the end of January, the US Federal Reserve on January 1 and the European Central Bank a day later.

With the currency going down, imported components of the family basket could generate less pressure on prices and help to moderate inflation.


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