The challenges facing the Petro government with the rise of the dollar

The challenges facing the Petro government with the rise of the dollar

The dollar has been showing high volatility in recent weeks. He has even had days with a price higher than 4,600 Colombian pesos. This devaluation of the local currency has generated uncertainty and concern in the national economy.

(Read: What is the best time to buy dollars and invest with the currency).

Now, this is one of the challenges that the government of the president-elect Gustavo Petro which begins its functions on August 7. Under these circumstances, Carlos Sepúlveda, Dean of the Faculty of Economics at the Universidad del Rosario, assures that the increase in the price of the dollar has very strong impacts on the economy.

Among them, a rise in the value of imports, pressure on inflation, effects on poverty and others.

Higher inflation also leads the Banco de la República to raise interest rates. That stops the economic momentum that we are seeing during this year“, Explain.

Therefore, the expert assures that the new government will have to face the inflationary pressures experienced at the international and local levels. This implies a series of measures in terms of monetary policies by Banco República. Also, a fiscal policy and clarity on the economic outlook.

(Also: The dollar ends the week with an adjustment in its price).

Sepúlveda also highlights the pension reform that has been considered as one of the key factors since it has a direct impact on investment. Likewise, he assures that the new government will have to prioritize the economic recovery for the handling of the inflation linked to the current poverty levels in the country.

It is a complex global scenario, in a post-pandemic recovery scenario, but linked to that, structural reforms that must be approached responsibly so that the markets continue to see Colombia as attractive and, in this way, continue to be an investment engine as a source of growth“, he assures.

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