The Colombian peso faced renewed pressure on Wednesday, February 12, 2025, as the United States dollar strengthened globally following key inflation data and trade developments.The dollar closed at COP 4,164.82 in Colombia, reflecting a rise of COP 11.02 compared to the Representative Market Rate (TRM) of COP 4,153.80.
This marks the latest in a series of fluctuations driven by economic uncertainty and shifting investor sentiment.During the trading session, the dollar fluctuated between a low of COP 4,140 and a high of COP 4,175.51.
Market activity totaled 3,013 transactions, amounting to $1.661 billion.Analysts attributed the pesos depreciation to increased demand for dollars as investors hedged against global risks while real-sector agents sold dollars in the spot market.
The pesos decline coincided with heightened concerns over United States trade policies under former President Donald Trump.Recent tariffs on steel and aluminum imports have fueled fears of escalating trade tensions, adding pressure to emerging-market currencies like the Colombian peso.
Meanwhile, expectations of slower interest rate cuts by the Federal Reserve have bolstered the dollars strength.Colombian Peso Fluctuates as Trumps Trade Policies Take Shape.
(Photo Internet reproduction)Colombias Peso and Fiscal PressuresColombias fiscal challenges further complicated the pesos performance.
Proposed reforms to the General System of Participation and increased government transfers have raised concerns about fiscal sustainability.These domestic issues have compounded external pressures from fluctuating oil pricesa key driver of Colombias export revenuesand global inflation trends.
Despite this weeks weakness, the Colombian peso has displayed resilience in recent months.On February 7, it briefly strengthened to COP 4,092 per dollar, breaking below the COP 4,100 threshold for the first time in six months.
However, ongoing volatility remains likely as analysts predict exchange rates could range between COP 4,000 and COP 4,800 throughout 2025.The pesos depreciation underscores broader challenges facing emerging markets amid global economic shifts.
As investors monitor upcoming inflation data and Federal Reserve policy signals, Colombias currency remains vulnerable.It faces pressure from both domestic fiscal uncertainties and international trade dynamics.
Businesses and policymakers must navigate these complexities carefully to mitigate further economic strain.