Today marks the start of 2023 here in Colombia after the final long weekend of the festive period – and there is much work to do. Little has changed since I last wrote on Friday, Brazil has taken a lot of the headlines locally so there has been little room for anything else.
One man who has been busy is President Petro, who yesterday found himself in Santiago with Gabriel Boric discussing regional agreements including energy, but before that he was also in Caracas.
Venezuela matters, make no mistake. Whatever your take on the Maduro regime—presidency is too kind a word—it contains huge potential for Colombia. It will never return to the huge trading partner it was, 2008 being the zenith, but there is much to be done. A commission will meet later this month to look at the 2012 trade agreement that was mothballed and other matters. Energy is also high on the agenda with Colombia’s need for cut price gas matching Venezuela’s need for dollars.
FY 2022 inflation of 13.12% didn’t pass unnoticed in the press, given that it is the basis of so many indexed items. Also we saw JP Morgan publish a report which predicts that interest rates will continue to rise – not to 12.5% as anticipated in recent surveys such as Fedesarrollo or Bloomberg but to 13% – the cycle ending in March. Upcoming surveys will be carefully watched.
Petro’s total peace plans took a blow last week as the ELN, key to stage one, claimed they hadn’t agreed to a bilateral ceasefire – such posturing is very much par for the course and seen regularly in the run up to the FARC agreement, but embarrassing for the government, nonetheless.
In terms of the markets, the peso will be under the microscope. On Friday it improved 1.5% to $4,855 and with oil starting to catch a bid due to the Chinese re-opening, it could be a decent week for the currency. It is worth noting that both Chile and Peru have seen their own currencies hit six month highs recently.
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My regards to all