Colombia’s President Juan Manuel Santos again proposed to slash three zeros from the country’s peso.
“I consider the initiative important to maintain the strength of our currency,” said the president in the central Colombian town of Sibate on Thursday where he was opening a viaduct.
The proposal to drop the zeros and create a “new Colombian Peso” was discussed two years ago, but failed to garner enough support to pass last year, and has now resurfaced in Congress on Santos’ initiative, who has long expressed his interest in replacing the currency.
The announcement on Wednesday by the president of the Chamber, Augusto Posada, said it was a great moment for the Colombian economy and “we want to put the country on par with developing countries.”
Santos said that the project would demonstrate and highlight the strength of the national currency and would bring more benefits than disadvantages.
“We have to take this step in order to blend in with the international reality. This amount of zeros confuses people and has a series of disadvantages. Reduce the number of zeros and you have the logic of the world. It is a small cost faced with the benefits that we are going to get with a measure of this nature,” said the president.
“Eliminate the three zeros from our peso. It is a project that didn’t have any luck in past legislation. I think that was the fault of lack of education and good explanation because realistically it is a project that only brings benefits – important benefits at a minimum cost, and has been discussed with the central bank,” said the president.
While in Sibate, Santos gave the example of opening the viaduct saying that if the initiative were to be successful, “this work, instead of costing 1.2 trillion pesos would have a slightly more reasonable figure of 1.2 billion pesos.” Though he did not reveal the cost of the initiative itself.
Two years ago estimates put the cost of printing an entire new stock of money at approximately $122,777 which does not include the money that would need to be spent on educating the public on using the new currency.
In Colombia’s strengthening economy, the three zeros give the false impression that the currency is weak, so by replacing the currency it could also allegedly provide symbolic power. However, it has been argued that besides political gains and symbolic advantages, the technical benefits would be scarce.