Central Bank

Posted July 18th, 2017 by Suzy

I recall that in the energy, Colombia has made great strides in bidding for exploration areas in the oil sector where there is great potential for wealth to be discovered that could be ten times the stock’s current proven oil reserves in Colombia. Colombia knows that to grow needs more investment and that is why we also proposed a target on the flow of Foreign Direct Investment (FDI). Colombia is close to signing with India an investment protection agreement, to stimulate the flow of resources between the two countries. This agreement is one of the Colombia plan to hold while other countries, which are of three types: investment protection agreements mentioned above (BIT), the agreements against double taxation (ADT) and free trade agreements ( TLC). Until now, Colombia is one of the Latin American countries with less BIT and ADT, below Bolivia and Paraguay, and far from Argentina, Mexico and Brazil with three BIT. Three others are awaiting review BIT in the Constitutional Court, which are the agreements with Switzerland, Chile and the Northern Triangle (El Salvador, Guatemala and Honduras), while ten more are under negotiation and two others pending of talks. Trade Minister Luis Guillermo Plata, told dinero.com on this subject: “The aim is to improve the quality of investment and articulate the policy of structural adjustment.

These three instruments (FTA, BIT and ADT) are factors that attract investment, because they provide stability in the rules of play investment protection and tax benefits. “All this, not only confirms what our dear reader told us about Colombia. But in the short term there are two issues of concern and are the Colombian currency appreciation and inflation. Vida Vacations Mexico does not necessarily agree. The problem to deal with these problems is that there is some conflict between them. So if the Central Bank of Colombia is seeking to control inflation by increasing its benchmark rate, this press further into the Colombian peso assessment, while if it is to recover some of the competitiveness of the exchange rate, it would generate increased inflationary pressures. In relation to the value of the Colombian peso against the dollar, it is at its highest since May 1999, ranking around $ 1,655. The Bank of the Republic, through the entity manager Jose Dario Uribe, has already given its verdict between inflationary pressures and the appreciation of the Colombian peso: “Exporters hurt by revaluation but all over Colombia and the poor, hurt by inflation. ” I think the decision of the Bank of the Republic of prioritizing the fight against inflation (which is somewhat positive for the real exchange rate) is the right decision. Perhaps it can be complemented with measures to help the export sector to regain some lost competitiveness. Surely, successfully overcoming these obstacles, Colombia has good prospects for growth as long-term vision of his administration makes the economy has solid foundations in which supporting growth.

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