The month split into two distinct phases, Grupo Cibest’s analysts wrote. Early in August, the Banco de la República (Bank of the Republic), Colombia’s central bank, surprised markets. Its board had voted at a July 31 session to hold the benchmark interest rate at 12% and to build up to $4 billion USD in international reserves through a new options-auction mechanism; when the bank ran the program’s first auction on August 3, buying $400 million USD, according to El Universal, the combination of the rate hold and the new dollar demand pushed the dollar down further against the peso. The mood reversed after August 27, when the government of President Abelardo de la Espriella, who took office August 7, submitted a revised 2027 National Budget to Congress that acknowledged a far deeper deterioration in public finances than previously disclosed.

The peso weakened sharply in the final days of August as the 2027 National Budget rattled markets. (Source: SetFX, prepared by Grupo Cibest; chart: Finance Colombia)

The revised budget raised the government’s projected total fiscal deficit from 5.3% to 7.2% of gross domestic product for 2026, and from 4.5% to 9.4% of gross domestic product for 2027, after incorporating obligations tied to debt service, pensions, health care, payroll costs, energy subsidies and the Fuel Price Stabilization Fund that had previously been underestimated. Grupo Cibest called the disclosure “a necessary reality check” and said clarity on the government’s medium-term fiscal adjustment plan, which has yet to be published, would be critical to the peso’s direction from here.

The 2027 National Budget nearly doubled the projected fiscal gap for both years. (Source: Colombia’s Ministry of Finance, prepared by Grupo Cibest; chart: Finance Colombia)

The currency’s slide happened despite favorable conditions abroad. The US Dollar Index fell 0.5% in August after a weak employment report, while Brent crude gained 0.3% to close the month at $90.04 USD per barrel — a combination that would typically support, not weaken, an emerging-market currency like the peso. Grupo Cibest said the divergence showed the depreciation was driven almost entirely by local, not global, factors.

A weaker dollar and firmer oil prices should have supported the peso in August; instead it depreciated. (Source: LSEG Workspace and SetFX, prepared by Grupo Cibest; chart: Finance Colombia)

Even with August’s reversal, the broader trend remains firmly in the peso’s favor. The exchange rate stayed below both its 50-day and 100-day moving averages for most of the month, and Grupo Cibest noted that the medium-term technical structure remains bearish for the dollar, with all three moving averages still trending downward. Analysts at Corficolombiana attributed the rally mainly to lower political and fiscal risk premiums tied to Colombia’s change of government rather than to any structural improvement in economic fundamentals, and it expects a partial correction in the exchange rate in the months ahead.

The exchange rate closed August below all three moving averages, a sign of sustained peso strength. (Source: LSEG Workspace, prepared by Grupo Cibest; chart: Finance Colombia)

The strong peso has split Colombia’s export sector from its import-dependent businesses and consumers. Between January and May, exporters stopped receiving approximately $12.2 trillion COP in revenue as a direct consequence of the currency’s appreciation, according to the same Corficolombiana analysis, with coal, bananas, flowers, coffee and labor-intensive manufacturing among the hardest-hit categories. Fenalco noted that those losses have been compounded by higher labor costs and by new United States tariffs on Colombian goods, which combine a 10% universal duty with an additional 2.5-percentage-point surcharge tied to labor-standards enforcement, and it pointed to Colombia’s 12% policy rate, one of the highest in the region, as a magnet for the short-term capital inflows that have helped drive the appreciation. Bruce Mac Master, president of the National Business Association of Colombia (ANDI), said in August that the trend was already undermining the country’s competitiveness as an exporter.

“The dollar is reaching levels of COP3,000, which without a doubt puts us in a very complex situation and takes away our competitiveness. It significantly affects exporters’ income when they convert it into pesos.”

— Bruce Mac Master, president, ANDI

Mac Master said Colombia should study measures to discourage those capital inflows, arguing that the central bank’s inflation mandate now competes with a bigger risk: eroding the country’s productive base. Corficolombiana’s own numbers suggest the picture is more mixed than exporters’ losses alone would indicate. The research firm estimated that cheaper imports saved Colombian businesses and households about $15.6 trillion COP over the same five months, for a net national benefit of roughly $3.4 trillion COP, and it found no significant widening of the trade deficit so far, in part because Colombia’s oil and gold exports have benefited from higher international prices even as their peso-denominated value has been squeezed by the exchange rate.

Tourism has felt a similar split. The association of travel and tourism agencies, Anato, told La República that the arrival of non-resident visitors fell 1.6% between January and May compared with the same period in 2025, as the stronger peso made Colombia a less attractive low-cost destination for foreign travelers. “The appreciation of the Colombian peso can create the perception of a more expensive country for foreigners, a situation that is worsened when combined with risk factors such as informality, security perceptions and travel warnings,” the association said. Anato’s executive president, Paula Cortés Calle, said the currency move complicates outbound travel as well: although a weaker dollar is usually seen as an incentive for Colombians to travel abroad, she said, the operational reality for travel agencies is more complex because of the time gap between quoting a trip and paying international suppliers.

Grupo Cibest expects the exchange rate to trade within a COP3,100-COP3,300 range in September, with risk running in both directions. On the upside for the dollar, the firm is watching the government’s promised Economic Rescue Act proposal, which it said would be critical in assessing Colombia’s ability to stabilize its public debt trajectory, along with continued pressure on US dollar liquidity. Foreign exchange intermediaries’ spot dollar cash position stood at $1.4 billion USD on August 9 before turning negative later in the month; Grupo Cibest expects it to settle near $800 million USD, well below the 2026 year-to-date average of $3.1 billion USD.

Dollar liquidity among foreign exchange intermediaries tightened sharply in the second half of August. (Source: Superintendencia Financiera de Colombia, prepared by Grupo Cibest; chart: Finance Colombia)

On the downside for the dollar, Grupo Cibest pointed to continued carry-trade activity, in which investors borrow in low-rate currencies to invest in higher-yielding Colombian assets, as well as to the central bank’s plan to keep purchasing close to $400 million USD in reserves per month through September. Additional support for the peso could also come from international aid tied to the reconstruction effort following the magnitude-7.4 earthquake that struck Chocó and neighboring departments on August 10.

As of September 7, the exchange rate stood at COP3,126, near the middle of Grupo Cibest’s forecast band, according to a market report carried by El Universal. Colombia’s August inflation figure, due the same day, was expected to remain above 6%, a reading that would keep pressure on the central bank to hold its policy rate steady even as the fiscal picture it revealed at the end of August continues to work through the market.

The magnitude 7.4 earthquake struck on August 10, centered near San José del Palmar, in Chocó, killing at least 111 people on its first day, according to Finance Colombia’s coverage of the disaster, which also drew $1.3 billion USD in international pledges in the weeks that followed, Finance Colombia reported at the time. Colombia’s disaster-management agency, UNGRD, put the toll at 331 deaths, 111 people still missing and 36,326 homes completely destroyed as of a September 7 update — the same day as the Chocó summit — according to Semana.

Officials are calling the new initiative Colombia’s own “Plan Marshall,” a reference to the US-funded program that rebuilt Western Europe after World War II. The goal, De La Espriella’s government said, is not simply to repair what the earthquake destroyed, but to use the reconstruction to close Chocó’s longstanding economic gaps and draw new investment to one of the country’s poorest departments.

“I don’t want 100 small, scattered initiatives, each going its own way, with every ministry announcing its own program,” De La Espriella told the assembled executives, according to Valora Analitik. “We are going to do proper planning, set clear priorities, secure the resources we need and, as a government, I am committing to stay on top of execution so that things actually happen.”

Among the projects announced is the Malecón Gastronómico de Quibdó (Quibdó Gastronomic Waterfront), a new promenade along the Atrato River in the departmental capital meant to revive tourism and commerce there. Chocó Governor Nubia Córdoba said financing for the project is guaranteed through contributions from the business sector, according to El Colombiano. A separate $1 trillion COP infrastructure and connectivity package will fund five road projects to improve Chocó’s links to the rest of the country, split evenly between Colombia’s works-for-taxes program and direct private investment, according to Valora Analitik.

The strategy contemplates new commercialization opportunities for Chocó producers, through direct-purchase mechanisms that will connect local production with large business chains. (Photo courtesy Presidencia de la República)

A $5 billion COP seed-capital fund, channeled through iNNpulsa Colombia with contributions from Colombina (BVC: COLOMBINA), Bancolombia, the banking arm of Grupo Cibest (NYSE: CIB; BVC: CIBEST), and Tecnoglass (NASDAQ: TGLS), is intended to benefit roughly 1,000 entrepreneurs affected by the earthquake, with about $5 million COP going to each business, Commerce Minister Gómez Amín said, according to El Colombiano.

The Ministerio de Comercio, Industria y Turismo (Ministry of Commerce, Industry and Tourism), known in Colombia as MinCIT, is leading several of the measures aimed at accelerating the region’s economic recovery. Nuquí and Bahía Solano, two Pacific coast municipalities in the earthquake-affected zone, were selected for a tourism-development push under what officials are calling a “Pueblos Milagro” strategy, backed by Fontur — the Fondo Nacional de Turismo (National Tourism Fund) — and the Fundación Santo Domingo.

Tourism is one of the strategic sectors of the agenda for Chocó, with the strengthening of tourist destinations such as Nuquí and Bahía Solano, selected among the municipalities in the affected zones that will be supported through Fontur. (Photo courtesy Presidencia de la República)

Companies including Olímpica, Grupo Nutresa (BVC: NUTRESA) and Colombina pledged to buy directly from Chocó producers, aiming to connect them with larger markets, the government said. Separately, officials said they will promote sales of biche, a traditional Pacific-coast spirit made by Chocó producers, through the Central Mayorista de Antioquia wholesale market in Itagüí, near Medellín.

The package also includes financial-inclusion measures, 100 scholarships for young Chocoanos — 50 of them pledged directly by Grupo Nutresa, according to Valora Analitik — solar-power generation for Pacific communities, a special regime meant to formalize small-scale mining, and a special tax and legal regime the government says is designed to attract private investment to the department. Officials also said they will study the feasibility of an interoceanic canal or a rail corridor linking the Urabá region with a deep-water port on Chocó’s Pacific coast.

De La Espriella framed the plan as a long-term commitment rather than a one-time relief effort.

“Chocó was not born to be poor. We are not simply going to rebuild what was lost — we are going to connect the department, attract investment, generate jobs and open opportunities. Government and business are united so that this time, promises become facts.”

— President Abelardo De La Espriella

Commerce, Industry and Tourism Minister Mauricio Gómez Amín said the government wants the reconstruction to leave a lasting economic footprint: “We have a historic opportunity to turn reconstruction into development. The challenge now is to translate these commitments into investment, jobs, new markets and concrete results for the people of Chocó.”

According to Valora Analitik, the business leaders who met with De La Espriella included Alejandro Santo Domingo of Valorem; brothers Jaime and Gabriel Gilinski of Grupo Gilinski; a representative of the Organización Ardila Lülle; David Vélez, founder of Nubank‘s parent, Nu Holdings (NYSE: NU); Bancolombia chief executive Juan Carlos Mora; Fuad Char of Olímpica; Colombina’s César Caicedo; Tecnoglass’s Christian Daes; and Miguel Cortés Kotal of Grupo Bolívar (BVC: GRUBOLIVAR).

Headline photo:Commerce, Industry and Tourism Minister Mauricio Gómez Amín speaks on the Chocó reconstruction plan.