Colombia’s Peso Holds Firm as Markets Prize Discipline Over Populism

Key Points

• The peso opened Monday near 3,712 per $1, helped by a softer global dollar and Colombia’s high-rate carry.
• Stocks extended a powerful run, with the COLCAP closing Friday at a fresh record as local liquidity stayed strong.
• Inflation politics are the main risk, after a 22.7% minimum-wage jump and a new electricity levy signal heavier state intervention.

The Colombian peso began the week in a narrow, confident range, trading around 3,712 per $1 in early Monday dealing, just below the official reference rate (TRM) of 3,717.09.

That TRM itself marked a firmer peso versus Friday’s 3,734.67, reflecting a market still willing to reward orthodox policy signals.

Friday’s trading session was busy but not frantic. USD/COP moved between roughly 3,698 and 3,733, finishing near 3,718, with about 1,456 trades and roughly $1.26 billion in notional turnover.

Buyers repeatedly defended the 3,700 area, while rallies above the low 3,730s struggled to stick. Over the weekend, the global dollar story turned shakier.

The dollar index slipped to around 99.0 after fresh U.S. political noise around the Federal Reserve, reinforcing a broader theme: when institutions look pressured, investors pay up for clarity elsewhere.

Colombia, for now, is offering that clarity through high rates and a central bank that is still talking tough. BanRep has kept its policy rate at 9.25%, citing inflation and fiscal constraints.

But the domestic political risk is rising. The government’s 22.7% minimum-wage increase to 1.75 million pesos, plus a transport subsidy that takes total minimum pay to 2 million, is already being called “absolutely unsustainable” by a leading bank economist.

That wage shock, paired with a newly announced temporary COP$8-per-kWh electricity charge tied to Air-e’s debts, feeds a simple fear: inflation first, credibility later.

Equities, meanwhile, are acting like a market that believes in momentum. The MSCI COLCAP closed Friday at 2,213.35, up 1.20% and at a new 52-week high on about 18 million in volume.

Top Friday winners (by %): ISA (+5.43%), Grupo Argos (+3.47%), Mineros (+3.41%), Grupo Energía Bogotá (+2.45%), Bancolombia Preferencial (+1.14%).

Top Friday losers (by %): Uber Tech (-3.02%), Cargills Bank (-1.02%), Grupo Aval Preferencial (-0.90%), Grupo Sura Preferencial (-0.56%), Berkshire Hathaway B (-0.40%).

Oil held in the low-$60s, supported by Iran risk headlines and Venezuela supply chatter, while gold surged to records—signals of unease that Colombia can navigate, as long as policy stays anchored.

This is part of The Rio Times’ daily coverage of Colombian markets and Latin American financial news.

For context on regional markets, see Brazil’s Ibovespa for the same session.

Also tracking regional peers: Chile’s IPSA closed the same session.

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