Colombian Peso Surges 23% as Dollar Inflows and High Interest Rates Boost Exchange Rate

The Colombian peso has made significant gains in 2026, appreciating by almost 23% against the U.S. dollar and reversing much of its sharp depreciation in late 2022.

Several factors have contributed to this strengthening, including strong dollar inflows, high interest rates, lower domestic risk aversion, higher oil prices, and an attractive interest-rate differential.

Banco de la República's central bank attributes the appreciation to these factors, as well as increased foreign investor holdings of Colombian government bonds.

The peso cost of imported goods and foreign-currency debt has decreased, while some inflationary pressures have been contained. However, exporters and domestic manufacturers that earn dollars or compete with cheaper imports are being squeezed by the stronger currency.