[Politics] Dollar reaches its record after Petro spoke of capital controls

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The dollar continued to rise in Colombia this Thursday and during the day it was traded on average at 4,626 pesos, practically the same as the maximum day in history that was July 12 of this year, when it was traded during that day at 4,627 pesos on average .

On the morning of this Thursday, trading reached 4,657 pesos, very close to the maximum in all history, which was 4,663 pesos, that same July 12.

The average rate this Thursday ended up being 77 pesos more than the representative rate of the current market for the day, which was located at 4,548.89 pesos.

(You can also read: Tax: unions warn of the business impact that the reform would have)

According to the Set-Fx platform, the currency opened the day with a price of 4,585 pesos and the maximum price reached at 8:48 was 4,657.4 pesos.

In the previous day, the foreign currency also registered a strong rise and erased the losses that it had added at the start of the week between Monday and Tuesday.

(Of interest: Capital tax raised by Petro defunds the government itself: experts).

The rise of the currency this Thursday is recorded a day after President Gustavo Petro said that raising the rates of the Bank of the Republic does not serve to contain inflation.

According to the Colombian president, if interest rates are being raised to prevent capital flight, a transitory tax could be imposed on these flows.

On the morning of this Thursday, in the midst of the rise in the dollar, Juan David Ballén, director of Analysis and Strategy of the brokerage firm Casa de Bolsa, said that with the dollar's all-time highs on the day, the peso "accumulates and leads the devaluation of the currencies of the region with more than 3 percent. Suggesting to carry out capital controls is a bad idea, it will generate a greater devaluation, inflation, rates and decrease".

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On Wednesday, Mauricio Cárdenas, former Minister of Finance, had written on his Twitter account, in relation to this issue, that the Issuer's board "does not have the power to adopt taxes, what it does is make capital inflows or outflows more expensive with measures exchange rates, such as compulsory deposits”.

But he also pointed out that a measure in this sense “would be suicide. The stampede of capital would generate more devaluation and more inflation”.

For his part, Munir Jalil, chief economist for the Andean Region of BTG Pactual, said: "Putting some limitation on the free movement of capital would affect not only the financing of the Government today, but also in the future, since these investors are going to prefer other countries that do not have these restrictions and allow them to enter and leave freely.”

(Keep reading: This is how the Petro tax will hit gas prices and reserves).

According to Petro's comments, to contain inflation it is better "the tax reform for large fortunes, the fertilizer subsidy, the agrarian reform, food in poor neighborhoods and the change in the energy rate formula."

https://www.eltiempo.com/economia/sectores/dolar-en-colombia-hoy-6-de-octubre-707819