Colombia’s Peso Went on a Round Trip Last Week — What It Cost You
Colombia · MONEY Key Facts —Today’s rate: The official TRM in force for 10 August is 3,157.43 pesos to the dollar, covering 7 to 10 August. —The round trip: 3,132.42 on 31 July, 3,230.44 on 4 August, 3,157.43 today — a swing of about three percent and back. —Net effect: Over the ten days the […] The post Colombia’s Peso Went on a Round Trip Last Week — What It Cost You appeared first on The Rio…
During the week of August 10, 2023, Colombia's official peso-to-dollar exchange rate fluctuated significantly, ultimately weakening fractionally against the US dollar. On July 31, the rate stood at 3,132.42 pesos per dollar, with the peso showing a marginal weakness at the start of the week. The rate then rose to 3,230.44 on August 4, marking a three percent swing in favor of the peso.
However, after reaching a high of 3,157.43 on August 10, the peso ended the ten-day period slightly weaker than it had been at the beginning, reflecting the impact of timing on the value of dollar-denominated transactions.
The fluctuations were primarily driven by political events surrounding President Juan Manuel Santos' inauguration on August 7, which included the abolition of the wealth tax, a spending freeze, and a commitment to re-authorize fracking. The US also pledged up to $1 billion in security assistance, contingent on congressional approval.
These developments created uncertainty in the currency markets, with the peso initially strengthening but then recovering part of its gains once the political transition passed without major hitches.
The rate, known as the Tasa Representativa del Mercado (TRM), is published one day ahead and remains fixed until the end of the day it covers, even during holiday weekends. Therefore, traders experienced a frozen rate during the Boyacá holiday and the subsequent weekend, with the official rate only adjusting on the following business day. This lag in responsiveness means that large transfers or dollar purchases scheduled around the holiday can be impacted by the delayed rate update.
For individuals earning in dollars and paying in pesos, the exchange rate change resulted in a cost of approximately COP 294,000 (around US$90) for a US$3,000 monthly transfer. This underscores the importance of considering timing when dealing with currency conversions. The TRM, while not a live market rate, serves as a critical reference for contracts, tax filings, and bank conversions.
The practical advice for those with significant peso holdings or pending dollar obligations is to spread out conversions over multiple days to mitigate the impact of daily fluctuations.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
