The value of the dollar in Colombia: how it will perform in 2024 and projections for the end of March. news today

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Photo: Bloomberg Agency

The dollar remains relatively stable in 2024 after last year’s volatility. It started the year with a representative market rate (TRM) of $3,895.53 and today stands at $3,901.51. On Friday it closed at an average of $3,901.35.

On exchange houses, on average, buying is $3,720 and selling is $3,853.

A slight upward trend was reported last week. Sergio Olarte, chief economist at Scotiabank Colpatria, explained that the increase is due to monetary policy decisions in the United States. This week, Federal Reserve officials unanimously decided to keep the benchmark federal funds rate at a range of 5.25% to 5.5% for the fifth consecutive meeting, the highest since 2001. He noted that he is on track to cut rates this year for the first time since March 2020, but now estimates only three cuts, down from the four he forecast in December based on the average estimate.

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However, Olarte adds that the increase in dollar supply due to “the influx of tax payment flows and the takeover bid for Nutresa” helped push the exchange rate down as the effect was not so significant.

This Friday, the Board of Directors of the Bank of the Republic decided to reduce the monetary policy interest rate by 50 basis points, bringing it to 12.25%.

José Andrés Rueda, professor at the Faculty of Economics and Administrative Sciences at the University of America, explains that at the moment it is still a good business to keep capital in Colombia. He says the decline in imports eases pressure on the dollar and that interest rates on the CDT, for example, continue to keep yields above inflation, “which allows yields in Colombia to be better than in the US.” ” ., maintaining capital. Country, regardless of notice of departure.

Alianza’s investment strategy manager Felipe Campos highlighted that despite the fact that the dollar appreciated in the world last week, it remained relatively stable in Colombia (although it increased slightly).

Also read: What are interest rates coming in Colombia according to analysts

What’s coming to the dollar in Colombia?

Predicting the future of the dollar is complicated (if not impossible), bearing in mind that its behavior is influenced by national and international variables.

There are only two business days in this week (Tuesday and Wednesday). Olart assured that Scotiabank Colpatria expects two issues to continue to play an important role: raising funds to pay taxes and last week’s decisions on monetary policy.

David Ballen, director of analysis and strategy at Casa de Bolsa SCB, estimates that this week will be quiet and with little volatility, taking into account the number of holidays. Jason Andres Balaguerra, Executive Director of Investment Banking at Values ​​AAA, expects the dollar to continue higher. $3,900, but not too far from this limit.

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Although the director assures that the increase in remittances will affect the dollar (the more they receive, the more the exchange rate may fall), he also points out that the impact in the country is minimal compared to countries like Mexico, where Remittances represent a significant portion of GDP.

Rueda agrees that the exchange rate will remain stable unless significant events occur, because, as mentioned, keeping capital in the country is still good business (the more supply of the dollar, the lower its value). , because “to request” expand the loan limit to borrow in dollars.”

▶️ Analysts participating in the Federative Financial Opinion Survey expect the exchange rate to range between $3,900 and $3,941, with the average response at the end of March being $3,920. By the end of 2024, they expect a rate of $4,050, which represents a decrease from last month’s forecast ($4,071).

▶️ In the monthly expectations survey of economic analysts of Banco de la República (March), the expectation for the March exchange rate at the end of 2023 was on average 0$4,025.

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