Colombian Peso Falls 3.01% in Week, Worst Among Emerging Markets

The Rio Times, the Latin American financial news outlet, reports that the Colombian peso devaluation reached 3.01% over the week ending May 8, 2026, making the COP the worst-performing emerging-market currency over the five trading days. The TRM closed at 3,747.10, up from approximately 3,637.51 a week earlier and 3,641.27 a month earlier, with the level marking the highest TRM since March 9. The slide unfolded alongside a 4-point widening of Colombia’s EMBI country-risk spread relative to peers, capturing in real time what BBVA, Credicorp and Aval Casa de Bolsa have all been pricing into client recommendations.

The Week’s Move

Over five sessions from Monday May 4 to Friday May 8, the TRM moved from approximately 3,637 to 3,747.10, a 109.59 peso increase or 3.01%. The spot-market price closed Friday at 3,736, with a daily range of 3,716 to 3,774 and an average of 3,747.54. The peso’s slide came as Brent crude pulled back from above 114 dollars per barrel to settle in the high-60s, removing a commodity-tailwind that had been one of the few supports for the currency through April.

The same week, the Brazilian real strengthened to near 4.90 per US dollar, the strongest level since January 2024, on the back of strong Q1 inflows totaling R$48 billion and Ibovespa Q1 returns of +16.35%. The divergence is not subtle: with Selic at 14.50% and BCB rate cuts being priced in for Q3, foreign allocators have rotated out of Colombian risk and into Brazilian risk on a fiscal-credibility basis.

BBVA’s Short Recommendation

BBVA Research’s strategy team led by Alejandro Cuadrado published a May 5 note recommending clients take a short COP exposure through three-month dollar-call options at strike levels of 3,750 and 4,000. The bank flagged the fiscal “bomb” and the May 31 presidential first round as the two principal risks, framed as an asymmetric profile where a continuation of the Petro fiscal trajectory could push the peso through 4,000 while a market-friendly election outcome would limit the downside.

The Underlying Drivers

Three forces are working against the peso simultaneously. First, the central-government fiscal deficit is projected to stay above 6% of GDP in 2026, with public debt at 1,238 trillion pesos and external dollar-denominated debt accounting for 59.5% of the external portion, mechanically amplifying any peso weakening. Second, the May 31 first round has produced a wide-open field with Iván Cepeda (Pacto Histórico), Paloma Valencia (Centro Democrático), and Abelardo de la Espriella (Defenderemos Colombia) all polling competitively.

Third, the Banco de la República held its policy rate at 11.25% on April 30 by unanimous vote, after a contentious 100 basis-point hike on March 31 that prompted Finance Minister Germán Ávila to walk out of the board meeting. Petro has called BanRep‘s rate decisions “stupidity,” “fascism,” and “economic genocide,” language that has materially raised the perceived risk of post-August institutional confrontation between the executive and the monetary authority.

The 2022 Comparison

Credicorp’s research note pointed analysts to the 2022 cycle for comparison: the peso traded around 3,800 in the second round of that year’s election and jumped to roughly 5,200 between the runoff and Petro’s August inauguration, a move of more than 37% in three months. The bank framed the current dynamic as “binary,” with the FX market positioned to make a sharp directional bet on the May 31 first-round result. BBVA’s three-month strike at 4,000 represents the central scenario in this framework.

Connected Coverage

The country-risk dimension is documented in Rio Times’ coverage of BBVA’s original May 5 peso-short recommendation. The fiscal architecture behind the weakness is detailed in our reporting on the record 1,238 trillion peso debt stock and the fifth tax reform attempt. Macro context is in our Colombia Economy 2026 Guide.

What to Watch

• DANE Q1 2026 GDP release on May 15
• April CPI follow-through (April print was 5.68%)
• BBVA strike levels at 3,750 (hit Friday) and 4,000 (3-month target)
• Ministry of Finance dollar-purchase operations for bond buyback

Frequently Asked Questions

How much did the Colombian peso fall?

The TRM closed at 3,747.10 on Friday May 8, 2026, up 109.59 pesos from the prior week’s close. That is a 3.01% weekly devaluation and 2.86% monthly devaluation, making the COP the worst-performing emerging-market currency over the five trading days ending May 8 and the highest TRM since March 9, 2026.

Why is BBVA recommending a short peso position?

BBVA’s strategy team led by Alejandro Cuadrado published a May 5 note recommending clients buy three-month dollar-call options at strike levels of 3,750 and 4,000. The bank cited the projected fiscal deficit above 6% of GDP, public debt at 1,238 trillion pesos, and the May 31 first-round election as the principal asymmetric risks. The 3,750 strike was reached Friday.

How does this compare to Brazil’s real?

The Brazilian real strengthened to near 4.90 per US dollar in the same week, the strongest level since January 2024. Brazil’s Q1 2026 Ibovespa returns of +16.35% with R$48 billion in foreign inflows mark a clean LATAM divergence. With Brazil’s Selic at 14.50% and rate cuts being priced in for Q3, Brazilian risk has rotated to the front of foreign-allocator preferences over Colombian risk.

What is the 2022 precedent?

Credicorp pointed to the 2022 election cycle for comparison: the peso traded around 3,800 in the second round of that year’s election and reached roughly 5,200 between the runoff and Petro’s August inauguration, a move of more than 37% in three months. The bank framed the current dynamic as binary, with the FX market positioned to make a sharp directional bet on the May 31 first-round result.

Updated: 2026-05-11T20:00:00Z