As of June 2024, an increase in the dollar was observed, as it reached 4,175 pesos, a value that had not been seen since the end of 2023. This has denoted a notable volatility of the US currency in ColombiaBut how does this affect the Colombian economy?
(Further: Colombia will not be immune to the end of the petrodollar era: what would be the effects?).
According to specialized portals, this fluctuation may be a negative factor for, first of all, the economy of companiesbecause if the exchange rate drops suddenly, import costs become higher, which would reduce the profit margin.
In second place, affects travelers taking international flights, Considering that most of them maintain a budget for this, more money would be required to cover the stay in the country they are going to.
(Read: How to identify when is a good time to buy dollars?).
It also directly harms ordinary citizens, because if it is on the rise The price of the family basket increaseswhich is made up of 400 products and, according to Dane, 38% of them are imported and paid for in dollars.
These foods include everyday items such as meat, fish, milk and coffee, which are imported, so if the dollar suddenly rises, they could become more expensive. Thus, the stronger the dollar is against the Colombian peso, the more expensive it will be to buy these goods.
(See: The projection of the dollar in Colombia for the end of 2024, according to ChatGPT).
The family basket would be affected by
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However, for the rise of the dollar to have a strong influence on prices, “It takes six months with the high exchange rate“, according to Camilo Pérez, director of economic research and market analysis at Banco de Bogotá.
“The price increase usually benefits those who receive remittances from abroad, exporters and the oil sector, since by converting the dollars received into Colombian pesos, they will obtain higher income. However, travelers, importers and companies with debts in dollars will face financial challenges due to higher costs.“, says Rodrigo Lama, Chief Business Officer of Global66 Colombia.
(Further: What is the ‘blue dollar’ and why Argentina has many quotes for the currency).
Finally, The cost of products you order from abroad could increase due to the strength of the dollarwhich maintains uncertainty for buyers, who at any given time may be harmed by purchasing a more expensive good or service, since the American currency was on the rise.
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