Re: Currency Hurting Colombia's Economy

Un huequito en la represa y lo intentan parar con un dedito.

? wrote:
>
> The Colombian currency's strength against the dollar is hurting
> Colombia's export-driven economy, officials said, announcing plans
> Thursday for further intervention in the foreign exchange market to
> stop the peso's appreciation.
>
> The peso has risen 17 percent against the dollar during the past 20
> months amid a heavy influx of dollars from rising foreign direct
> investment, a trade surplus and more dollars being sent home from
> Colombians working abroad.
>
> To offset the steady flow of dollars into this South American nation,
> Colombia's Central Bank purchased $5.74 billion (euro4.7 billion) in
> the currency market between January 2004 and August this year, pushing
> the country's foreign currency reserves above $15 billion (euro12.27
> billion) for the first time - but still failing to stop the peso's
> rise.
>
> "We are going to continue intervening in the foreign exchange market,
> we have been very aggressive and will continue to be," Finance Minister
> Alberto Carrasquilla told reporters after leaving a meeting in Bogota.
> On Wednesday, the minister said Colombia's surging currency "is
> whipping our country."
>
> The strong peso has made banana, flower, fish and other exports more
> expensive and less competitive abroad. Carrasquilla said the government
> was drawing up plans to help industries particularly hurt by the
> appreciation, but did not provide details.
>
> Agriculture Minister Andres Felipe Arias said the government was
> considering helping agricultural exporters through some type of minimum
> exchange rate guarantee. Analysts criticized the plan as merely a
> stopgap solution that fails to tackle the underlying causes of the
> peso's appreciation.
>
> Though the peso's strength has created woes for many Colombian
> exporters, it has made it easier for the government and companies to
> pay back dollar-denominated debt, and has also been a boon for many
> importers.
>
> http://www.forbes.com/entrepreneurs/feeds/ap/2005/09/15/ap2227542.html
.