Colombia’s trade minister urged the country’s Central Bank Thursday not to raise interest rates and to purchase more U.S. dollars to mitigate the negative effects of the Colombian peso’s revaluation.
Minister Sergio Diaz-Granados spoke at a meeting with hundreds of American business representatives in New York at a conference aimed at increasing foreign investment in Colombia following the free trade agreement (FTA) between the two countries that went into effect May 15.
Diaz-Granados feared that potential foreign investors would be scared off by the recent revaluation, leading him to suggest purchasing U.S. dollars as a safety measure to ensure economic stability.
“Many entrepreneurs who want to export [Colombian goods] fear for the situation of our currency. The request to the [Central] Bank is simple: do not raise taxes and buy more dollars. Hopefully that will help us with this issue,” explained Diaz-Granados.
Due to the 18 to 20% revaluation, businesses “will be required to be increasingly productive,” to compensate for the potential decline in revenue.
Concerning the fear that business owners would close their doors due to the revaluation measures, Diaz-Granados said “We are in the normal cycle of business where companies are born and others die.”
A month after going into force, the U.S.-Colombia FTA is already yielding results, according to the minister, with experts from Colombia’s private sector and academic circles advancing strategies on how to make the economic treaty more effective for both countries.
A priority for Colombia is to ensure that health measures continue to be met, as the U.S. requires health permits for imported goods like Colombian tropical fruits and vegetables that are popular with American consumers. The U.S. recently authorized health permits to allow the importation of Colombian arugula, celery and spinach.
