Colombia Peso Advances to Five-Year-High

elk says on Dec 20, 2006, 03:25:

Inflow of dollars into Colombia If your waiting for a stronger dollar in 2007 then you might want to reconsider. I recently purchased an apartment here in Medellin and made the mistake of using an ATM card to move money from my U.S. Bank account to Colombia for the purchase. I had the option of writing a check for the full amount rather than making daily trips to the ATM machine.

For your information Conavi doesn't charge a 7 or 8% commission as reported on PBH. I wrote one check for $7,000 USD in October and the fee was 7/10th of one percent compared to the use of my ATM card. I would have saved several thousands dollars had I purchased by check not to mention the daily trips to the ATM machine.

I see the influx of dollars to continue during the next year resulting the in a weak dollar vs peso exchange rate. Colombians are returning from the U.S. for retirement and bringing dollars with them. Colombia is becoming a popular destination for foreigners and their investment dollars not to mention foreign companies investing in the country.

I think we will continue to see a weak dollar in the immediate future. Just my opinion....

aztec says on Dec 20, 2006, 05:09:

elk,, expat's are certainly wanting... ...to return to Colombia. Until very recently the process was not encouraging. The government has become aware of the difficulty and has actually made some changes in banking regulations for accommodating the transition.

As recently as the last two years a couple of us made substantial transfers of dollars. One person who is a member of this site moved several million dollars to Colombia for investment.

We immediately became entangled in new international banking laws. At that time none of the professionals were aware of how to administer the Colombian rules and regulations. We discovered that most of them had never heard of the regulations.

I believe last year the government closed a procedure that allowed Colombians to incorporate off shore and thereby avoid Colombian taxes. Some of us were preparing to use this route for purchasing real estate and thus avoid the whole question of form 4, 5, 11 and the inheritance complications.

Investments can be made but be advised there are a whole range of rules and regulations that are different from those in the States. Even today I would advise anyone to seek competent assistance from professionals experienced with foreign investments.

el flaco says on Dec 21, 2006, 01:43:

It's not the peso The peso isn't getting stronger, the dollar is getting weaker. The pound sterling is also at a five year high against the dollar.

adrimm says on Dec 21, 2006, 02:31:

Yep. The Canadian dollar reached a 14 year-high agains the US dollar this past spring.

Dolfi says on Dec 22, 2006, 00:47:

Not to mention the Euro.
Not to mention the Euro.

Brians says on Dec 22, 2006, 08:16:

With the US economy slowing this will continue However expect a dip in a the US stock market in the next 4 months. Probably caused by a short term financial crisis. In my estimation it will be hedge fund related. Anyway these short term incidents will actually cause a strengthening of the dollar as over short periods of time all stock markets are correlated with the USA. Thus there would be a flight to US goverment bonds as a safe haven and a strengthening of the dollar. I base my opinion on a lot of things I see. I would use this as an oppotunity to move money into Colombia at a good rate like I used the market pullbacks last June and July and was able to convert at 2,500 to the dollar. I think you will see that opportunity again short term but longer term dollar will only weaken.

Ctg Bound says on Dec 27, 2006, 05:56:

Elk The second half of the article from Bloomberg, might be of interest to you and what we discussed a few weeks ago:

Colombia Peso Bond Remains at One-Month High on Debt Sale Cuts

By Andrea Jaramillo

Dec. 26 (Bloomberg) -- Colombia's benchmark peso bonds remained at a one-month high after the government scaled back its 2007 debt sale plans.

The bond was unchanged after it gained on Finance Minister Alberto Carrasquilla's Dec. 22 announcement that the government will offer 20.8 trillion pesos ($9.4 billion) of peso-denominated bonds in government auctions in 2007, less than the 24.7 trillion pesos initially planned.

``The market continues to react positively to the news,'' said Ignacio Miro, an analyst at Skandia Pensiones & Cesantias SA in Bogota. ``A reduced supply of the securities, added to strong demand, should push yields down.''

The yield on Colombia's 11 percent peso bond due July 2020 closed unchanged at 8.79 percent, its highest since closing at 8.72 percent on Nov. 15, according to the central bank. The bond's price, which moves inversely to its yield, closed at 117.018 centavos per peso of face value.

Colombia's peso rose to an almost six-year high, led by an increased inflow of dollars into the economy led by higher remittances and money from coffee sales abroad.

The Colombian currency climbed 0.1 percent to 2,226.50 pesos to the dollar, its strongest since Feb. 12, 2001. The peso has rallied about 16 percent in the second half of the year, the best performance among the 70 currencies Bloomberg News tracks against the dollar.

``The amount of money sent from Colombians living abroad always increases with the holiday season and results in a significant inflow of dollars,'' said Juan Carlos Nino, Bogota- based head of Banco Agrario's money-market trading desk.

Money sent from Colombians who have lived abroad for more than a year rose to a record $3.3 billion in 2005, more than double the value of the country's second-largest export, coal.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1 at bloomberg.net

Link:

http://www.bloomberg.com/apps/news?pid=20601086&sid=aHlObhVc8_6s