The price of the dollar rose again: it closed at $4,548.25, but it has lost $267.99 so far in 2023
The Minister of Finance, José Antonio Ocampo, after the Banco de la República's announcement to increase the interest rate, warned that there is a slowdown in the devaluation of the peso and that the international context is much more favorable for Colombia
The dollar registered maximums in Colombia in recent months. Reuters/Dado Ruvic/Illustration
After almost completing seven days of decline, the price of the dollar had a small rise on Friday, January 27. On this day, the US currency closed at an average of 4,548.25 pesos, which means an increase of 16.5 pesos compared to the Representative Market Rate (TRM), which stood at 4,531, 75 pesos.
Dollar continues to fall and closed at $4,546Soon, there will be another meeting of the board of directors of the Banco de la República to possibly change interest rates
The currency had an opening price of 4,515 pesos, also being the minimum of the day. The maximum value at which the dollar was traded was 4,583 pesos. According to the Set-FX platform, more than 822 million dollars were traded on this day in 1,503 transactions.
When closing the last week of January, it can be seen that the dollar has lost 267.99 pesos, since the beginning of the year, when it was at 4,816.24 pesos on January 2, until January 27, when it was at 4,548.25 pesos.
Dollar, inflation and interest rates would have these behaviors by 2023According to the Financial Opinion Survey (EOF) of January 2023 by Fedesarrollo and the BVC, the US currency would close the year at $4,750
On the slowdown of the devaluation of the pesoagainst the dollar, the Minister of Finance, José Antonio Ocampo, after learning that the board of directors of the Banco de la República decided to increase its monetary policy interest rate by 75 basis points, going from 12% to 12.75%, warned that The international context is much more favorable for Colombia, with the issuance of local and international bonds that the national government has been able to do.
It should also be noted that the increase in the price of the dollar occurs one day after the announcement that Felipe Bayón will leave the presidency of Ecopetrol in March.
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Below you can see how The price of the dollar has varied in the first two weeks of January.
< img class="aligncenter" src="/wp-content/uploads/2023/01/price-of-the-dollar-went-up-again-closed-at-454825-but-has-lost-26799-in-the- que-va-de-2023-5ecd70b.jpg" alt="Price of the dollar rose again: it closed at $4,548.25, but it has lost $267.99 so far in 2023" />
Banco de la República raised interest rates
In its first meeting of the year, the board of directors of Banco de la República decided to increase its monetary policy interest rate by 75 basis points, going from 12% to 12.75%.
The rise in the interest rate to 12.75% was adopted by majority, as five co-directors voted for the increase of 75 basis points and two for one of 25. In fact, the general manager of the Banco de la República, Leonardo Villar, said that, with the decision adopted, in today's session, monetary policy “is close to the position required to induce in the medium term a convergence of inflation towards its target of 3%”.
He also indicated that leading indicators point to a slowdown in economic activity since the fourth quarter of the year. “For 2022, growth of 8% is estimated, while the technical team's forecast is 0.2% for 2023,” said Leonardo Villar.
It should be remembered that the latest increases were made by 100 basis points, and there was even a rise of 150 in June of last year. With the decision announced on Friday, January 27, the Banco de la República will begin to moderate the rate of rise in its interest rates, despite the fact that last year the inflation closed at 13.12% per year.
In another of his statements, the issuer's manager assured that:
“We are close to the level at which this convergence of inflation to the target is achieved, based on the information and perspectives that we can look to the future today. That does not necessarily mean that the period of increases has ended.”
One of the conclusions highlighted by the Banco de la República, in its first meeting of 2023 , was that total inflation (13.12%), as well as basic inflation, which does not include food or regulated items (9.5%), “continued their upward trend in December, reaching records above those estimated by the technical team and analysts”.