reassessment or inflation: the dilemma of the Colombian Peso

· Economics
Authors

The Colombian Peso is currently going through a reassessment that worries many and makes happy others in the Coffee country. Only this week the dollar felt in an unusual proportion that went against expectancies and the governmental measures to stop the reassessment, more to give a little peace to exporters. However exporters have more to worry now since the Colombian peso became the most reassessed currency in the region, according to Bloomberg. At this time a dollar is 1.655.01 pesos, meaning a surprising fall of 28.51 pesos and 52 in the last two days. To this the Colombian government, in the head of the Finances Minister, Óscar Iván Zuluága, said that nothing will be done to this respect like the control of dollars revenue. Only during the last six months, the currency of Colombia revalue in 20.3% in relation to dollar, said the Colombian economy’s magazine Portafolio. The last time that the peso was in 1.655.01 was on June 8, 1999.

Exporters in an attack of nerves

The most worry sector with this new situation is of course the exporters. Moreover, the surprise of Minister Zuluága with the dollar’s fall in such a way affected also the prize currency market, because he gave the impression that there is not control of the exchange house, said the national analyst Jaime Rodríguez to El Colombiano newspaper from Medellín, one of the cities more affected due to be one of the first exporter regions of the country.

It is expected however that next Friday the Bank of the Republic would define the interest rates. The dilemma is currency reassessment and inflation, the first to affect the exporters that are paid by dollars and the second to affect the poor who is paid by pesos.

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