The dollar in Colombia (TRM) today presents a downward variation of:+$ 13,04 (+0,33%) Colombian pesos (COP) with respect to the last day published on january 04 2024.
How does the value of the dollar affect international trade?
A lower dollar (TRM today) makes imports cheaper, which benefits consumers who wish to buy foreign goods in Colombia at cheaper prices.
For the domestic industry, this situation has two sides: on the one hand, and given the possibility for consumers to purchase imported products at better prices, domestic production loses competitiveness in the domestic market. On the other hand, it is possible to acquire inputs and capital goods, which are those required to produce other goods, at lower prices.
Moreover, in this scenario, Colombian exporters receive fewer pesos for each product they sell abroad, which affects their profitability and makes them less competitive in foreign markets.
In contrast, the increase in the value of the dollar makes imports more expensive. This implies that acquiring foreign goods in Colombia becomes more expensive and that domestic products become more competitive in the domestic market, but it also makes inputs and capital goods more expensive.
Also, a more expensive dollar improves the country’s export revenues.
For these and other reasons, the way in which Colombian companies participate in international trade and the health of the national economy depend to a large extent on the value of the dollar (TRM) today.
How does the value of the dollar affect foreign investment?
The impact of the value of the dollar on foreign investment in Colombia is significant, as it may influence investors’ perception of the profitability and stability of their investments.
Investments in Colombia could be more attractive to foreign investors if the dollar were stronger, as their investments would have a higher value in terms of their own currencies.
However, investors may be wary of a weaker dollar, as their investments could lose value in global terms.
Investment decisions may be affected by fluctuations in the value of the dollar, which has an impact on the flow of capital into the country and on economic development in general.
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