The Colombian peso (COP) plummeted for the second consecutive day against the dollar amid global economic uncertainty over President Trump’s tariffs.
As has become customary, whenever nervousness takes hold in both domestic and international economic systems, the Colombian currency experiences significant depreciation against stronger currencies, particularly the US dollar.
Early this morning, the exchange rate in Colombia between the peso and the dollar exceeded 4,430 COP per dollar—a level not seen since last year—leading to increased costs for various products Colombia imports through transactions conducted in dollars.
Sharp devaluation of the Colombian peso against the dollar amid Trump’s tariff crisis
Last week, markets across half the world began showing signs of unease, with widespread declines in major indicators. The cause was U.S. President Donald Trump’s announcement to impose broad tariffs on imports into the country.
Initially, the dollar underwent a downward adjustment against several currencies, including the Colombian peso, reaching an exchange rate of 4,136 COP per U.S. dollar last Friday, April 5.
However, this situation was short-lived. The week opened yesterday with confirmed stock market declines in Asia, Europe, Latin America, and, to a lesser extent, the United States.
In this context, the U.S. currency began strengthening against the Colombian peso. At times during yesterday’s trading, it reached rates above 4,400 COP, though it ultimately closed at 4,290.
Today, Tuesday, April 8, the peso’s decline in value has solidified. By early afternoon, the exchange rate stood at 4,440 COP, with markets awaiting the final closing rate for the day.
Five years of volatility and depreciation
The exchange rate relationship between the Colombian peso and the U.S. dollar has been marked by a sustained devaluation trend of the peso over time. For decades, the dollar has strengthened its position against the Colombian currency, a phenomenon influenced by multiple internal and external economic factors.
One of the most critical moments occurred in 2020 with the outbreak of the COVID-19 pandemic. Global uncertainty, the collapse of oil prices—one of Colombia’s main export products—and the decline in foreign investment caused an abrupt drop in the peso. That year, the U.S. currency exceeded 4,100 COP, setting a historic record at the time.
However, the highest peak was reached in November 2022, when the dollar rose to trade above 5,000 COP. This phenomenon was driven by a combination of factors: the strength of the dollar globally due to interest rate hike policies by the U.S. Federal Reserve, internal political uncertainty in Colombia, and market concerns over reforms proposed by the new government.
These types of devaluations are largely explained by Colombia’s dependence on commodity exports, political and fiscal instability, and the country’s risk perception—factors that deter international investors.
In recent years, the exchange rate between the peso and the dollar has shown high volatility and instability. This situation reflects the Colombian economy’s sensitivity to external shocks and internal political decisions, reinforcing a trend in which the peso continues to lose value against the dollar.
Related: Colombian Peso Falls Against Euro, Despite a Slight Recovery Today.