Colombia’s peso has lost 6% of its value against the dollar in the last month amid dropping oil prices and insecurity about how a financial crisis in Greece will affect the Euro.
Over the past year, the dollar went from 1861 pesos on July 8, 2014 to peaking at 2697 pesos just after midday on Tuesday, a 44% loss in value.
The drop in value has gone in par with the drop in oil prices as more than half of the South American country’s exports consist of oil products.
According to analysts, global insecurity about Greece’s financial crisis has additionally spurred more interest in the dollar.
While the cheap peso is good news for visitors and exporters, for example of coffee and flowers, manufacturers who depend on imported goods have seen production prices rise.
Additionally, the declining peso has pushed up inflation levels, leading to increased food prices that mainly affect lower-income households.
The South American country last year produced 31.6 million ton of food products, of which 4.4 million ton were exported, according to the Colombian Society of Agriculture (SAC).
“We imported 10.3 million ton, which adds to an apparent consumption of 37.3 million, meaning that 27.5% [of food products] is imported,” SAC president Rafael Mejia told economic daily La Republica.
Economist Francisco Chavez of Corredores Davivienda told Caracol Radio on Tuesday that it’s “feasible” the dollar breaks through the 2,700 barrier this week.
El dólar en Colombia se acerca a los $ 2.700 (Caracol Radio)