Dollar has more value vs Colombian Peso

[buencamino]

Seems like the daily exchange rate has been set well below actual daily trading levels for the last month or so or since the dollar started to really climb. Wonder why that is.

[robert angel]

Seems like the daily exchange rate has been set well below actual daily trading levels for the last month or so or since the dollar started to really climb. Wonder why that is.

Because they're all in Strawberry Fields--- Nothing is Real...(Smoke and Mirrors)

[fathertime]

Seems like the daily exchange rate has been set well below actual daily trading levels for the last month or so or since the dollar started to really climb. Wonder why that is.

Are you talking about the atm exchange rates?   What are you getting nowadays?

Fathertime!   

[buencamino]

Yes ATM. Depending on your US banking entity and the debit card they supply, you get at or somewhere below the official rate posted on the Banco de la Republica website for that day.

[robert angel]

I never cared much for dealing with the potential risk, but are 'black market' dealers for USD-COP exchange fairly common in Colombia? I know in other nations they are.

[fathertime]

Yes ATM. Depending on your US banking entity and the debit card they supply, you get at or somewhere below the official rate posted on the Banco de la Republica website for that day.

Well that is annoying.   So for example, if the rate is 3000 today ballpark what you are likely to get, given the new protocol.   

Have you thought to inquire why there is suddenly a difference now?

Thanks,
Fathertime!

[Awesome]

I never cared much for dealing with the potential risk, but are 'black market' dealers for USD-COP exchange fairly common in Colombia? I know in other nations they are.

I know of a few people (gringos) in Medellin who exchange money for a lower rate than what the licensed exchangers charge.  It's a win-win for the customer who gets a low exchange rate and the seller who makes a few bucks (or pesos) for doing basically very little.


But it's nothing like Venezuela which actually has two drastically different exchange rates, the "official" government rate and the real rate which is the "street" or "black market" rate.

[robert angel]

Noticed early this morning the USD to COP exchange rate was 'showing'  at 3003. It's also at a five year high in the Philippines,  as well as in other nations.

[buencamino]

FT MasterCard is the debit card my banking facility issues. I have tried in vain to get an answer as to why the actual exchange rate I get at the ATM varies so much.  I have been docked as little as 3 pesos to the dollar and as much as 50 off the official exchange rate. Nobody at MC has offered an answer but obviously the difference is what MC is making it's money from.

There may be a black market exchange but I haven't heard of it nor have any of the expats I've talked with.

[robert angel]

Can't speak for Colombia, but in some places I've been, the mall ATMs give me the best exchange rate. I guess they figure you'll spend more of the money there. The banks typically were third, behind the medium sized, licensed privateers w/ curb side operations. I've been some places were usually the Muslims gave me the best deal, but I was always trying to guess how much to cash in, wondering which way the rate was going. Anytime it's at a five year high, it's probably a good time to go in bigger.

Some big fed reports and response to china's devaluations expected today. They don't need much to spook them already. http://www.forexcrunch.com/

[fathertime]

FT MasterCard is the debit card my banking facility issues. I have tried in vain to get an answer as to why the actual exchange rate I get at the ATM varies so much.  I have been docked as little as 3 pesos to the dollar and as much as 50 off the official exchange rate. Nobody at MC has offered an answer but obviously the difference is what MC is making it's money from.

Interesting, Mastercard is an american company.  Have you already contacted an American representative, or are you speaking with Colombian representatives? If you find this worth your time, I'd like to hear the outcome, and what their justification could possibly be.    Unless there is something I'm missing, this sounds like a future class action lawsuit waiting to happen.  If it is, I hope there are hefty punitive damages included.   IF indeed you get somewhere with a representative I think I'd ask for reimbursement for past underpayments. 
Thanks for the info,
Fathertime! 

[fathertime]

Can't speak for Colombia, but in some places I've been, the mall ATMs give me the best exchange rate. I guess they figure you'll spend more of the money there. The banks typically were third, behind the medium sized, licensed privateers w/ curb side operations. I've been some places were usually the Muslims gave me the best deal, but I was always trying to guess how much to cash in, wondering which way the rate was going. Anytime it's at a five year high, it's probably a good time to go in bigger.

Some big fed reports and response to china's devaluations expected today. They don't need much to spook them already. http://www.forexcrunch.com/

Thanks for the link Robert.  The Peso rose dramatically again today.   


Now that the Colombian Peso has finally reached over 3000, I'm pretty much ready to die, as I've now witnessed the pinnacle of human existence. What could be better?   


Fathertime!   

[benjio]

I'm pretty much ready to die, as I've now witnessed the pinnacle of human existence. What could be better?   


Fathertime!

LOL!!  I'm visiting friends in Barranquilla in about 5 weeks. I hope this rate holds!

[robert angel]

Thanks for the link Robert.  The Peso rose dramatically again today.   


Now that the Colombian Peso has finally reached over 3000, I'm pretty much ready to die, as I've now witnessed the pinnacle of human existence. What could be better?   


Fathertime!

You're quite welcome, Father Time--always a pleasure to report good news.

Just checked--nice to see it (and the Philippine peso) both holding at these five year levels as of a minute ago. We got the tile floors put in our little house over there, done cheap just today.

But once again, you never know about tomorrow and we're 'gittin while the gittin's good.' We were looking at Aeropostale , Hollister and American Eagle T shirts and stuff on summer closeout to send over seas at the mall tonight. 

We decided to see if sending green backs there and having them buy what they want over there and forgetting the hefty fees shipping would boil down to. Too good to last.

[Calipro]

I use VISA...this is their currency calculator



http://usa.visa.com/personal/card-benefits/travel/exchange-rate-calculator.jsp


I imagine Mastercard has one also.

[buencamino]

Thanks for that tip. Unlike your Visa page the MasterCard page doesn't show rates for all countries and Colombia is left out. However here is what appears to be their explanation for setting their rates (?)

"MasterCard uses multiple market sources (such as Bloomberg, Reuters, Central Banks and others) to develop exchange rates. These rates generally reflect either wholesale market rates or government mandated rates that are collected during the daily rate setting process. The displayed rates are derived from the buy and sell rates included in the MasterCard daily rate setting process and do not include any charges or markups applied by the Issuer. Please note that due to possible rounding differences, the displayed rates may not precisely reflect the actual rate applied to the transaction amount when converting to the cardholder billing amount. The exchange rate that is applied to a transaction is the exchange rate as of the day of settlement which is the day that MasterCard determines the settlement amount to be exchanged between the acquirer and the issuer."

Having made many ATM transactions I wonder if you observed a lot of daily variation like I have in the amount under the official rate that you were paid.

[buencamino]

Here's a good write up from today on what's happening with the dollar vs peso in El Pais:

http://www.elpais.com.co/elpais/economia/noticias/por-hay-acostumbrarse-dolar-caro

By all accounts the dollar is going to remain high for a good while.

[robert angel]

The dollar is once again rising fast against the colombian peso...around 2550-1 today.  This is likely based on the market's belief of a US interest rate hike late this year. 


I got to thinking about what posters such as Buencamino said about when the peso was around 3000 or so to the dollar  in around  around 2003, if we factor in Colombia's higher inflation rate, especially 10-15 years ago, if we were to hit 3000 again, the purchasing power would still not be nearly what it was in years past.  We may need to hit 4000-1 in order to get that same purchasing power.  This is just me thinking aloud, but I'd like to hear from long time Colombian residents.  In today's dollars what would it take to come close to that high water marks from the halcyon era circa 2003?




Thanks,


Fathertime!   

Looking back less than a couple months, it's apparent how quickly things can and do change in economics.  It wasn't too long ago the Canadian dollar was worth more than the USD.(rare historically and it wasn't for very long) Today its $1.31 in the USD's favor. While it's easy for me to say now: "Oh, I saw it coming"---'common sense' as we know it, doesn't often apply. The fed hasn't even raised interest rates yet (probably will next month) and hasn't since June, 2006, but all they have to do is talk about it or have people THINK they're going to talk about it and markets change. Like spooked horses.

Some powerful people don't want a strong dollar because it makes domestic exports  more expensive abroad.  But according to the IMF, our exports accounted for only 9.3% of total US economic output and only about 25--30% of that is really subject to foreign competition--things like bull dozers, front end loaders and few other products are. It's interesting that with our number one export, foreign companies like JCB and Mitsubishi to name but two companies make a lot of theirs right here in the USA. Funny how we cry about oil, but it's our third largest export item and most of the wells we hit, we cap for later, while buying everybody else's while it's still cheap. Not too dumb there, really.

Here's the top ten US exports:

1.Machines, engines, pumps: US$219,566,232,000 (13.5% of total exports)
2.Electronic equipment: $171,966,197,000 (10.6%)
3.Oil: $157,213,437,000 (9.7%)
4.Vehicles: $135,797,903,000 (8.4%)
5.Aircraft, spacecraft: $124,831,567,000 (7.7%)
6.Medical, technical equipment: $84,879,104,000 (5.2%)
7.Gems, precious metals, coins: $65,522,480,000 (4.0%)
8.Plastics: $63,025,216,000 (3.9%)
9.Pharmaceuticals: $43,967,977,000 (2.7%)
10.Organic chemicals: $42,255,264,000 (2.6%)


But lot of the same people who don't like a strong dollar don't like cheap oil either. And oil's at about a five year low now. Not that anywhere near the percentage of the real price decrease of oil has been passed along to consumers.

It's ridiculous how badly Canadians take it on the chin for petrol prices. I'd hope my car would run better running using Seagrams--largest maker of alcoholic beverages on earth.

What works best for the vast majority of citizens, namely cheaper imported goods--typically from Asia, less expensive vacations, cheaper food, gas, oil and utility bills, aren't what the very rich, or the politicians who they finance and who cater to them, really want.

The politician's try and rationalize  knocking down the dollar's value and ramping up inflation by saying acting like that doing so creates more jobs here at home. But really, a lot of those rich folks are creating new jobs----mostly overseas. And boy, oh boy, do they play the currency exchange game. The biggest players open and close factories in different nations to squeeze maximum profit on a global scale. They typically don't care, especially in third world nations, about laying people off for weeks or months, or simply shutting down cheaply made factories, paying cheap wages and setting up elsewhere.

Right now, the overall global economy is pretty screwed up, but I liked the analogy I heard that said it's sort of like a chair, and the USA is the strongest leg on the chair right now. China's down for the count now, but they're really playing games (as usual) but much more aggressively lately with their curency, manipulating it's value even more than the USA usually does, so don't count them down and  out for too long. Heck, they'll just arrest more people and make them produce via forced labor, more goods for export if they feel like it. Not that the people working in Chinese factories now are getting rich or are very happy. Anyone seen the stories about Apple factory workers in China and their high suicide rate? Must be kind of demoralizing working your ass off making iPads, knowing you'll never be able to afford one.

[fathertime]

Fresh highwater mark today....3060-1.   


Something may be seriously amiss though here in the states though.  The market has plummeted nearly 1400 points off it's (Very) high point, a few months back...and appears to be heading lower still. 


"Buy the rumor sell the news"....I"m wondering if that will be the case here with dollar-peso exchange...all along it was anticipated that we were raising rates, no saying for sure if we will, and if we do, is the dollar strength really justified?  I hope so, it does make travel abroad less expensive, and can lower prices for imports.   


Fathertime!   

[fathertime]

You're quite welcome, Father Time--always a pleasure to report good news.

Just checked--nice to see it (and the Philippine peso) both holding at these five year levels as of a minute ago. We got the tile floors put in our little house over there, done cheap just today.

 

That's great...I just today sweated my ass off setting about 350 sq ft of stone tile across the patio... 


If you don't mind disclosing, I'm curious what the cost was for you to have the tilework done in the Philippines?


Thanks,


Fathertime!   

[robert angel]

That's great...I just today sweated my ass off setting about 350 sq ft of stone tile across the patio... 


If you don't mind disclosing, I'm curious what the cost was for you to have the tilework done in the Philippines?


Thanks,


Fathertime!

Well, Father Time--it's sort of a classic 'Filipino Style' situation, where nothing is perfectly clear and nothing is ever fast---in fact it's still actually being done, room by room. Money and materials are there, but I was premature in saying it was 'done today'. Paid for the other day yes, but 'done' especially over there, is very different.

We set aside a certain amount of money, typically adding to an amount that we're clear on already when the dollar's up in value. It's easy to keep tabs on $$$ sent and spent nowadays, but there's no trust issue. In fact we have to tell her Dad sometimes that we insist on paying for things. Guess they never forgot when we helped rebuild their home when the typhoon wiped it out.

That money goes to the house and other stuff too--my youngest sister in law's tuition, books, a small college spending 'allowance' for her, etc. I think for months now, we've been 'going to' finalize the title on the house, which with everything, is about $800 for the lawyer, other govt. payments, including making sure the valuation for tax purposes is as advantageous as possible--again, it's different than here, slow and more expensive than we figured. But pay more now and save even more long run, as it works out. No straight lines.

Her brother might do the lawyer, govt, house title thing or maybe we'll do when we're there in November--no big deal. They won't see my white ass--the rate would double.


But I'd guess, were going to spend about $600--$700 on nice white ceramic tiles, grout, moisture block liner and installation when all is finished--we'll pay the cousin who's doing it at night, outside of his commercial tile day job too----total could be (probably will be) less.

Wood floors are the cheapest thing there and tile and stone is upscale.  Funny how bamboo is trendy here--there it's the lowest priced flooring--like dirt cheap almost. My Father in law knows someone in the tile business so that's a break and as said, a cousin is doing tile work itself.

The house was owned by an Aussie family before, so it has some upgrades. Still we added an exhaust fan to the kitchen and we're thinking of bringing the bath room up closer to USA standards. I won't miss cold showers, although I never needed coffee to wake up after them!

[buencamino]

According to Bloomberg the dollar closed today at $3,107.65 COP. It will be interesting to see what figure is published tomorrow morning by the Banco de la Republica as the TRM (exchamge rate) of the day. The two figures are typically not in lockstep.

[fathertime]

According to Bloomberg the dollar closed today at $3,107.65 COP. It will be interesting to see what figure is published tomorrow morning by the Banco de la Republica as the TRM (exchamge rate) of the day. The two figures are typically not in lockstep.

I'm interested in seeing that number too. 


It has been a very nice run to this point....I don't know the Colombian economy, but just looking at the US situation, I'm guessing the peso won't be going too much higher from this point, and may find itself going lower.  I hope I'm mistaken, but the ability to aggressively raise interest rates here in the US is going down the drain with the tremendous market falls this week.  Can't really predict with accuracy what will happen next week/month. 


Fathertime! 

[fathertime]

But I'd guess, were going to spend about $600--$700 on nice white ceramic tiles, grout, moisture block liner and installation when all is finished--we'll pay the cousin who's doing it at night, outside of his commercial tile day job too----total could be (probably will be) less.

Great Scott! That is a good bargain. 


Fathertime! 

[fathertime]

So far today the peso has risen almost 100 just today, to 3205-1. Gets better every day for the expats with dollars.  The US stock market was down almost 1100 points this morning, although currently it is 'only' down 525.  I don't know how this all shakes out, but it is crazy times.


Fathertime!