In the last month the dollar has dropped $245, that is to say that the peso has appreciated 5% in that period, However, this week figures will be released that could accentuate the fall again, as has happened with other Latin American currencies, or bring the currency back to $5,000.
These assumptions will be influenced by several facts: tomorrow Tuesday the inflation figure in the United States will be known and one day later the Federal Reserve will hold its last meeting of the year and as the consensus says, it would raise its interest rate by 50 basis points.
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On the 15th, that is, on Thursday, the European Central Bank also has a monetary policy decision scheduled, with a possible increase of 50 basis points. And on the 16th, the Banco de la República will carry out what many consider to be an increase of 100 basis points to close the year at 12%.
Analysts say that if the Fed is forced to continue raising interest rates dynamically, the dollar could rise again, but if there are signs that inflation subsides, the end of the year for the dollar it will remain calm and could even go lower above $4,700 and even below that level.
For Wilson Tovar, manager of Economic Research at Acciones & Valores, “the dollar should structurally weaken with a world recession in 2023 to allow some support for the economy.”
He considered that if inflation in the US “it is strong we will see new increases in the interest rate in that country and it could reach 5%, which would give more volatility and strength to the dollar before the recession begins”. He said you could expect a currency rate “with a wide volatility range as we expect it to go back to $4,650 but it would also take us even as high as $5,050, but hopefully that doesn’t happen,” she said.
He assured that with the high inflation that was registered in November in Colombia (0.77% in the month and 12.53% in annual terms) “another 100 basis points of rise in the rate of the Bank of the Republic will be needed” .
José Ignacio López, executive director of Economic Research at Corficolombiana, explained that “The arguments for an increase of 100 points are clear since inflation continues with significant inertia, and there are also signs of a slowdown”.
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In that sense, he said regarding the dollar that “the markets andThey are expectant as a 50-point hike from the Fed is expected but there may be volatility with the message that is given and we think that the speech will be strong or hawkish and with greater pressure on the peso towards the end of the year”.
Felipe Campos, Alianza Valores investment strategy manager, indicated that the fall of the dollar It has been taking place since the end of September in the world and in Colombia, “after the change in the messages from the Government, the currency stopped rising, but it has not fallen as much as the other currencies have.” He also pointed out that an expected increase in rates in Colombia is 100 basis points and more after “the manager of the Banco de la República acknowledged that the economy was overstimulated and that is why the discourse is changing.”
For his part, Arnoldo Casas, investment director of Credicorp Capital, said the end of the year should not have many surprises, but the FED will give color to the market as to whether more rate hikes are coming.
He pointed out that the markets will be pending the pension reform in 2023 and warned that annualized inflation in the first quarter will be exceeding 13%.
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