GENERAL OPPORTUNITIES AND THREATS WITH AN EXCHANGE RATE OF $ 4,080 USD/COP

This week started with another drop in oil prices ($ 29.55 per Barrel of BRENT crude) and also the main stock indices around the world kept going down. This is due, among other factors, to the decrease in global economic activity, to government measures, to the decisions of large capital funds and to the expectation of a decrease in consumption due to the impact of preventive measures resulting from COVID-19.

Although there is no exact inverse correlation between oil prices and the Colombian Peso (COP) / United States Dollar (USD) exchange rate, this trend has been observed recurrently and during times of economic turbulence it is even more pronounce. As the risk-averse investors seek to safeguard their wealth in safer assets like United States Treasury bonds or in hard currencies like the Dollar (USD) or the Japanese Yen (JPY), the price of the dollar tends to increase in value.

For people who reside in Colombia or carry out all or some of their economic activity in Colombian pesos, we have prepared these observations:

Investment Banking
Russell Bedford GRUPO GCT