Business

Colombia ends 2012 with record high foreign currency reserves

posted by Wesley Tomaselli
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Colombia Reports - Dolar

Colombia finished 2012 with the highest amount of foreign currency reserves in the country’s history.

According to data from Banco de la Republica, the country’s central bank, at the end of 2012, Colombia had $37.46 billion in foreign currency reserves — a 16% increase from the same period in 2011. Of the reserves, 87% is in US dollars with the remainder divided up between euros, Canadian dollars and Australian dollars.

Colombia is currently feeling pressure from economic analysts and government officials to increase foreign currency purchases in the interest of curbing a surge in the Colombian peso. A strengthening peso, analysts worry, could cripple manufacturing and other price competitive export sectors that rely on a relatively weak peso.

According to Bloomberg, Finance Minister Mauricio Cardenas told reporters that “the government is aware that this [a rising peso] is a problem. It’s a reflection of the economy’s strength.”

“We will be studying formulas, options in the next few weeks to address this situation,” said Cardenas.

Policy makers plan to discuss ways to curb the strengthening peso when the central bank meets later this month.

About the author

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Born and raised in upstate New York, Wesley Tomaselli studied at Cornell University. He developed an interest for international relations and money flows when working in northern Italy in 2008 and watched the US financial crisis unfold from the other side of the Atlantic. Tomaselli holds down Colombia Reports’ desk in Bogota and covers primarily business and economics.

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