On April 2, Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Iraq and Oman announced that, from May to the end of 2023, They will apply a “voluntary” reduction in oil production in addition to that already agreed at the OPEC meeting at the end of last year, official sources reported.
(Read: The reasons for the recent fall in the price of the dollar in the country).
They also pointed out that these “voluntary” reductions have been decided “in coordination with some other participating countries” of Opec+, which they did not specify.
However, the decision and other factors They have already begun to be reflected in a significant drop in the price of the dollar against the Colombian peso in recent days.
On April 3, the average trading price was 4,602.70 pesos, 43.38 pesos below the Representative Market Rate (TRM) of the day, which is 4,646.08 pesos. And this April 4th the average trading price was 4,587.16 pesos, 15.84 pesos less than the TRM.
(See: The dollar, without a floor in Colombia: it is already trading for less than $4,590).
According to Jeisson Balaguera, CEO of Values AAA, the Opec decision has made the price of oil rises between 5% to 6% and that it continues with an upward trend.
Since oil is one of the main export products in the country, “It implies that there is more income since more dollars are charged for oil. In the short term, this causes more dollars to enter the country and its price tends to go down.“, points out Balaguera.
Among the reasons for the strengthening of the peso are the regulatory measures to mitigate the banking crisis that have caused, once again, optimism for risk in emerging countries, including Colombia and the caution that the government reforms have had, with which The pressures on fiscal accounts and the concern of international investors have eased somewhat.
According to Banco de Bogotá, the weakness of the dollar makes emerging currencies appreciate.
On the other hand, Sergio Olarte, principal economist at Scotiabank Colpatria, the general economic crisis in the world seems to have been solved after the regulatory measures that the central banks implemented by providing the necessary liquidity, thus generating the aversion to risk that had been generated has decreased significantly, which has once again caused risk optimism in emerging countries, including Colombia.
(Read: Deterioration of the credit portfolio is felt but it is still of low magnitude).
Finally, Matías Cristancho, manager of economic research and strategy at Davivienda Corredores, said that the caution shown by the government’s reforms has alleviate a little the pressures that the fiscal accounts would have and, therefore, the concern of international investors.
BRIEFCASE
