Colombian peso flirting with 2700 !

[Nico]

The Colombian Peso closed yesterday at 2675 per dollar. The dollar is gaining on that 2700 mark. Mexican peso is at 9.9 to 1. Man if you're planning a trip to any of these countries or all already in one ,especially Colombia, I would imagine you will have or have some very nice purchasing power.

[denvermike]

... in response to Colombian peso flirting with 2700 !, posted by Nico on Aug 28, 2002

Just a few comments on the dollar.

I don't pretend to be an expert in international monetary policy, but the peso to dollar ratio is extremely critical to many countries in SA. Almost all major business activities are done in dollars, so when the dollar gets strong it hits the business community real hard.  Here in Chile the dollar is considerably stronger just like Colombia.  Many Chileans have savings accounts in US dollars as a hedge against the purchase power of the fading peso.

Now that the peso to dollar ratio is increasing, a lot of people are converting their dollars into pesos.  I have heard that some Cambios are actually refusing to sell you pesos for dollars because the sell to buy ratio has been so high.

mike

[hombrecaliente]

... in response to Colombian peso flirting with 2700 !, posted by Nico on Aug 28, 2002

Nico,

get real. The prices of goods/services IN Colombia are going UP as well,so I think our "power" will be limited;-)
It's normal everywere in countries which high inflation rates. In some countries prices will be changed every week!!
I am just telling basics economics here.

just my 2 cents here.

HC.

[El Diablo]

... in response to Re: Colombian peso flirting with 2700 !, posted by hombrecaliente on Aug 28, 2002


Kit's right, devaluation of the peso against the dollar is not necessarily reflected in increased good prices in Colombia.  For imports yes, but for goods and services produced in Colombia definitely no.  

El Diablo

[Pete E]

... in response to Re: Colombian peso flirting with 2700 !, posted by hombrecaliente on Aug 28, 2002

My wife came back from Colombia 3 weeks ago.I asked her if she noticed prices going up since the peso was down.She said no.I'm sure it will at least have an effect on imported goods as the cost of these will go up,but that could be delayed by inventories.
I noticed the prices going up as the peso went down in Mexico 20 years ago or so,but this was in tourist areas.They know what foriegners will pay.But Colombia is not much of a tourist economy,primarily you buy where the locals do.It might effect hotel rates in Cartegena or San Anreas or some place like that.
Whats also amazing is this has happened while the dollar has declined against most other currencies.If you are from Europe the peso dropped alot more against your currency.

Pete

[Kit]

... in response to Re: Colombian peso flirting with 2700 !, posted by hombrecaliente on Aug 28, 2002

Not quite like that. In a global economy that would be the case. However Colombia is pretty isolated country and therefore pretty much produces and consumes mostly internally. I am sure prices for food, accomodation and clothing didnt fluctuate as much as peso did. So yes greenback buying power definitely goes up.