The Colombian peso positioned itself, at the close of December, as the most revalued currency among emerging market currencies during this final month of 2025. For much of this period, the peso posted a notable advance against the U.S. dollar, even outperforming currencies traditionally considered strong within the emerging market group.
This phenomenon drew the attention of investors and analysts, not only because of its magnitude, but also because of the global context of volatility and economic expectations surrounding it.
In an international environment in which the dollar showed signs of weakness and global markets navigated uncertainty over U.S. monetary policy decisions and capital flows toward higher-risk assets, the performance of the Colombian currency stood out for its strength.
That performance reflects not only external conditions that have favored emerging economies, but also particular dynamics in Colombia’s financial market that have influenced the supply and demand of foreign exchange.
Colombian peso leads emerging market currency gains in December
During the first weeks of December, the Colombian peso recorded an appreciation of around 3.2% against the dollar, according to data compiled by international financial agencies. This revaluation placed it above currencies such as the Thai baht and the South African rand, which also posted gains, though to a lesser extent.
Compared with other Latin American currencies, the Chilean peso and the Mexican peso also rose, but did not match the pace of the Colombian currency.
The appreciation of the Colombian peso was not an isolated phenomenon within the group of emerging economies, but it was the most pronounced during December 2025. The Thai baht, with a gain close to 2.98%, and the South African rand, at 2.58%, ranked next in the list prepared by financial agencies.
Further behind were currencies such as the Chilean peso and the Mexican peso, which also showed revaluations, although smaller than that of the Colombian peso.
In contrast, several emerging currencies faced depreciations against the dollar over the same period. The Brazilian real recorded a decline, as did the Turkish lira and the Indonesian rupiah, among others.
This contrast between revalued and devalued currencies highlights the heterogeneity of emerging economies and the different vulnerabilities and strengths they face in response to external shocks and international monetary policy decisions.
This outstanding performance was the result of a combination of global and local factors. On the one hand, expectations of a possible interest rate cut by the U.S. Federal Reserve reduced the appeal of the dollar as a safe-haven asset, weakening its demand globally and creating room for other emerging market currencies to gain ground.
At the same time, greater risk appetite among investors favored capital inflows into emerging market assets, including Colombian ones.
Internal factors that strengthened the currency
Although the international context was an important driver, the peso’s behavior cannot be analyzed without considering internal elements that contributed to its strengthening.
Financial analysts pointed out that specific operations in the Colombian market, such as the sale of government bonds and dollar monetization movements, helped increase the supply of foreign currency in the local exchange market, putting downward pressure on the exchange rate. This greater availability of dollars made it easier for the peso to appreciate against the U.S. currency.
The impact of global volatility and investor strategies was also cited, as, given the perception of lower risk in emerging market assets, investors shifted capital out of the dollar into currencies such as the Colombian peso. In this context, the dollar’s exchange rate against the peso reached lower levels, an unusual situation for this time of year, when demand for the U.S. currency traditionally increases.
The positioning of the Colombian peso as the most revalued emerging currency in December has implications both for the local economy and for the perception of international markets.
For households and companies that conduct transactions in dollars, a stronger local currency can translate into lower import costs and reduced pressure on the prices of imported goods. However, this type of appreciation also has complex effects, such as potentially reduced export competitiveness and lower revenues for export-oriented sectors.
For investors, the peso’s ability to stand out within a broad group of emerging market currencies may reflect a combination of economic resilience and yield opportunities in peso-denominated assets. Likewise, interest in Colombian securities and financial markets is strengthened in a context of lower demand for traditional safe havens such as the dollar.
As analysts assess whether this trend will continue in the coming months, the performance of the Colombian peso in December 2025 will remain a milestone in the recent history of the national economy and a reference point for understanding exchange rate dynamics in a world where financial balances and global expectations continue to shift.
Related: Colombia’s November Unemployment Hits Lowest Level Since 2001.