The Colombian peso strengthens and becomes the best-performing currency this year as President Gustavo Petro's popularity weakens, according to a new analysis of the relationship between the value of the Colombian currency and the approval of the country's president.
According to an article recently published by Bloomberg, this year the Colombian peso had an increase of 22%, which represents the largest increase among the more than 140 currencies analyzed by Bloomberg.
The information highlights that the strengthening of the Colombian currency is supported by high-interest rates and the increase in the price of crude oil. However, it also states that the rise of the peso is directly and inversely related to Gustavo Petro's popularity.
Shortly before Petro assumed the presidency, and after promises to lead the country under leftist policies, the peso plummeted. But as the president's popularity has waned and his reforms have stalled, the value of Colombia's currency has recovered.
#Peso soared 22% this year.
For #Colombia’s president, it’s for all the wrong reasons.https://t.co/8tuACVLiqG
— BQ Prime (@bqprime) September 25, 2023
A Datexco Opinionometer survey showed that Petro reached the worst approval rating since he began his presidency. Data collected from September 21 to 23 indicated that disapproval reached 63%, which is effectively coinciding with the further strengthening of the Colombian peso.
Felipe Pianetti, portfolio manager in the emerging markets debt team at Lazard Asset Management in New York, explained that these data would indicate that the rise in the currency shows that the market does not actually believe that Petro's agenda will advance, causing a strengthening to occur. However, the expert warns that the currency is in a vulnerable state, since if Gustavo Petro manages to pass any legislation, the value of the currency could be significantly impacted.
