Colombia’s currency is tumbling against the value of the dollar, descending to over 2,400 pesos on Friday. While all oil exporting countries have been hit by falling oil prices, the peso has fallen by 21% since June.
Colombia’s exports are dominated by crude oil, which raise over a quarter of government revenues. Oil prices have fallen over 40% since June.
Colombian manufacturers engaged in exports will be among the winners, as are those Colombians with saving in dollars. Normal Colombians will however notice that all imported goods are becoming more expensive, and those with debts to importers or debts held abroad will be hit.
“...suddenly, Colombia has become cheap,” says Jorge Restrepo, analyst of RCN Radio. Some are questioning how long the current strength of the dollar and the low prices of oil will last.
Central Bank director Jose Dario Uribe told press that “we don’t know what will happen with the price of oil, or if on the contrary [the peso] will deepen its fall. We never used to make predictions because the price of the dollar depends on multiple factors and many of them are unpredictable.”
Colombia’s exports are dominated by crude oil, which raise over a quarter of government revenues. Oil prices have fallen over 40% since June.
Colombian manufacturers engaged in exports will be among the winners, as are those Colombians with saving in dollars. Normal Colombians will however notice that all imported goods are becoming more expensive, and those with debts to importers or debts held abroad will be hit.
“...suddenly, Colombia has become cheap,” says Jorge Restrepo, analyst of RCN Radio. Some are questioning how long the current strength of the dollar and the low prices of oil will last.
Central Bank director Jose Dario Uribe told press that “we don’t know what will happen with the price of oil, or if on the contrary [the peso] will deepen its fall. We never used to make predictions because the price of the dollar depends on multiple factors and many of them are unpredictable.”