When the pandemic arrived and the first global economic consequences were unleashed, the dollar had an upward behavior, reaching a maximum of $4,153.91 on March 20, 2020. Although this behavior was reversed for a few weeks due to the crisis in Ukraine, which took it to touch lows of $3,723, this week radically changed its trend again.
In fact, so far in 2022, the dollar it has increased by $104.97 compared to the Representative Market Rate (TRM), while only in the first five days of the month it has risen by $119.86, a movement similar to that seen when the coronavirus arrived.
LR conducted a survey with different analysts to find out their projections for the price of the currency, less than a month before the presidential elections are held.
“For the Colombian peso, the outlook is not very encouraging, since it rose $300 in a week with purchases triggered by offshore agents and a very high devaluation curve that makes long positions more expensive, however, when it comes to covering little matter, we will be operating in the $4,060-$4,120 range, with an eye on $4,235,” said José Luis Hernández, Corficolombiana’s institutional trading desk.
Juan David Ballén, director of Analysis and Strategy at Casa de Bolsa, agrees with this position, who foresees the same price “if confinement in China is prolonged, the increase in interest rates and geopolitical tensions in Ukraine, since it would increase the risks of a recession this year. The results of the elections will also be fundamental, they could make the upward movement a little more extended or not.
The price has also been explained especially by the global economic recovery from inflation, the intervention rate of the Federal Reserve, oil and the repercussions of the Russian invasion of Ukraine.
Similarly, the scarcity of some raw Materials and key products on account of the Eurasian conflict is a severe blow to certain sectors of the economy in Latin America.
Camilo Pérez, director of Economic Research and Market Analysis at Banco de Bogotá, assured that “at the moment of greatest uncertainty, the exchange rate can enter a range between $4,200 and $4,400.”
Although the US currency has had a relatively sustained growth since 2014, in the last 12 months its price has risen $345.99, while compared to pre-pandemic prices, the increase has been up to $808.
“Election season will impact the dollar. For it to reach levels of $4,100, not only would the uncertainty due to voting have to remain, but conflicts must continue abroad, in addition to inflation that climbs much higher,” said Sergio Olarte, chief economist at Scotiabank Colpatria.
The Colombian peso is the most devalued currency since April 18 (2.99% today), after the South African rand (1.50%) and the South Korean won (1.37%).