After knowing the results of the second presidential round, in which Gustavo Petro was elected as president of Colombia for the period between 2022 and 2026, There was speculation about the soaring of the dollar to $5,000 in the country’s exchange houses, precisely as a result of the victory of the leftist leader.
(Will a dollar be possible at $5,000 today in Colombia?).
According to analysts, after Petro’s victory, it is true that there is a high probability that a strong volatility in the markets during the next two weeksin which significant increases could occur.
Just like what happened last time, after the results of the first presidential elections. Although the effect was the opposite, after knowing the high possibilities for Rodolfo Hernández to win, the price of the US currency presented a significant drop of $134 to reach $3,792.
Likewise, decisions made by the next presidentafter his possession on August 7, will also affect the movements of the markets.
(The economic and fiscal impact that Gustavo Petro’s ideas would have).
However, Jeisson Balaguera, executive director for Values AAA and professor at the EAN University, explains that here it is important to keep in mind that “one thing is for a proposal to be economically viable, and another for it to be politically viable.” Therefore, you should wait and be cautious when talking about the subject.
In this sense, and as a result of this supposed rise in the currency after the victory of the left-wing leader, the question arises about how how the price of the dollar is defined in exchange rates and the regulations that exist regarding the issue in the country.
In Colombia, there are two prices of the dollar: the ‘spot’, that is, the one that is negotiated in exchange houses, and the ‘official’ or Representative Market Rate (TRM). According to Balaguera, in most cases, the first value is much lower than the second, since the ‘spot’ is defined according to the daily demand and supply of foreign currency.
In other words, “there is no established regulation, but the price of the dollar in exchange houses depends on the market and even on the TRM itself that works as the minimum reference base price”, he points out. In fact, “in the exchange houses they are free to sell the currencies at the price they want, the point is that they buy them at that value”.
Of course, with respect to the TRM, the Banco de la República is the one that regulates this value, depending on the daily movements that occur at the economic level.
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