Q24N — The U.S. dollar keeps slipping against the Colombian peso, hitting lows on Monday not seen since October 2018. Early trading saw the dollar drop to 3,028 Colombian pesos, underscoring the peso’s strong rise and hinting that the dollar might soon fall below the 3,000 mark.
The official market rate (TRM) settled at 3,048.12 pesos on Monday.
This drop is a relief for consumers and businesses that rely on imports—whether it’s products, raw materials, or equipment. But for those tied to exports, it’s sparking concern. Exporters receive fewer pesos for their dollar earnings, which could hurt their competitiveness, production, and jobs in Colombia.
The dollar’s slide has been ongoing for weeks, pushing the Colombian peso among the top-performing emerging-market currencies. On Monday, it started around 3,039 pesos before dipping to 3,028—the lowest since October 5, 2018.
Several global factors are at play. The dollar is weak across the board, and uncertainty over U.S. monetary policy is adding fuel. Market watchers are keeping a close eye on U.S. Treasury yields and interest rate trends.
Commodity prices also matter here. Oil, a major Colombian export, took a slight hit Monday after rallying the previous week. Meanwhile, geopolitical tensions in the Middle East and potential U.S. sanctions on Iran keep investors on edge.
All these elements combined are pushing the dollar down in Colombia, while the peso gains strength fast. The current TRM of 3,048.12 pesos marks nearly a 24% drop compared to the same day last year, according to exchange rate data.
This trend is ringing alarm bells in the business community. Bruce Mac Master, president of Colombia’s National Business Association (ANDI), says the peso’s sharp rise is squeezing exporters’ competitiveness.
The issue is simple: exporters earn dollars but get fewer pesos when they convert those earnings. That shrinks profit margins and makes competing with companies in countries where the currency hasn’t risen as much much tougher.
Mac Master also warned that a weak dollar hurts jobs and producers who depend on global markets. “Every product priced in pesos becomes more expensive in dollars,” he said.
“That’s a huge hit to competitiveness,” he added. “If this strong peso trend continues, exporters will face very tough times ahead.”
ANDI is urging economic authorities to step in, suggesting that cutting interest rates could help ease the pressure on the exchange rate.
Mac Master, supporting the central bank’s recent dollar-buying moves, called for a rate cut for the first time in two years. He emphasized the need to lower interest rates to discourage the massive inflow of international capital into the country, which is contributing to the peso’s surge.