Colombia is implementing a “series of measures that seek to halt the appreciation” of the peso, President Juan Manuel Santos said Monday.
The government implemented a “package of measures, because there is not one that individually solves the problem,” Santos said at speech in the country’s capital Bogota.
According to the President, the government will lower the production cost in the industrial sector by eliminating a surcharge.Bogota is also preparing a thorough study of existing tariffs to reduce the cost of importing capital goods and inputs needed for production.
Santos reiterated that Congress has already been proposed two structural reforms that allow to combat the surging peso on the middle term.
The first bill seeks to stimulate a government to reduce its budget deficit when more money is coming in. “This way we can stop the pressure of debt in dollars as well as avoid cycles of boom and crisis.”
The second bill is part of a package of legislation involving mining royalties and consists of the creation of a savings fund that will be managed by the central bank. “These funds have been used in countries like Chile and Noway to prevent the so-called Dutch disease because they oblige to save dollars and invest them later,” Santos said.
Apart from the government measures, the country’s central bank has been buying 20 million dollars a day to pressure the price of the peso. In response, the peso showed a slight decline over the past week and closed on 1,802.8 against the dollar on Monday.
