What Jumps Out: Colombian Peso on Watch Amid Middle East Conflict, Bogotá Faces Water Rationing

Colombia won’t be the only country watching its currency after the events of the weekend in the Middle East.

If Brent oil prices spike due to concerns over oil supply, then logically the Colombian peso should shift back down below 3,800 to the US dollar once again. If the concerns over an escalation increase, however, then we may see a flight to dollars and the peso may come under pressure.

This won’t be a question for today, but for the coming days — and even weeks — depending on how the story develops. Thus far, the reaction appears calmer than expected.

But the situation is still in development mode.

On the weather front, El Niño front may have abated somewhat, with April opening with a deluge of rain. But there are still huge concerns over the lingering effects and some of the mixed messaging over recent weeks.

Predicting the weather in a country such as Colombia is impossible due to its proximity to the equator, two oceans and the fact that it is covered with mountains. The authorities, IDEAM Colombia made it clear that the country would take time to normalize — and that has proven the case.

Bogotá is suffering from water rationing, reservoirs have dropped to record lows, and there are concerns again about energy shortages.

On Saturday reservoirs hit a record low of 29.96%, and the government has stated that 27% would be a critical level. The energy minister is urging the country’s thermal generators to work full throttle in order to guarantee that we don’t suffer from electricity outages. XM had urged caution last week in terms of consumption — although, unfortunately, only a few weeks ago they were telling us there would be no outages. Now, the tone has changed somewhat.

Finally, politics is never far away in Colombia, with President Gustavo Petro and the congressional president still at loggerheads due to the collapse of the health reform.

While we await further developments regarding the pension reform, where the opposition parties have refused to attend, Petro should be on safer ground with education reform.

In reality, this is perhaps where he should have concentrated his efforts since 2022. While all these areas need some sort of reform , it is education where the need is most critical.

Remarkably, for a country that has ambitions of grandeur, education in Colombia is not a right. It depends largely on where you are born — and to who. Those days need to be condemned to the past and, hopefully, by the time Petro leaves office, he will have committed huge recourse to the problem.

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