The value of the Colombian peso per US$1 was 2,179.3 in December 2000. This reflects a loss of over half its value against the dollar since 1995, when it traded at 912.83 pesos to the dollar.
Colombia's monetary policies are formulated by the Junta Monetaria (Monetary Board), and banking operations are regulated and supervised by the Superintendencia Bancaria. The Central Bank conducts monetary policy based on behavior of the financial sector, and determines the amount of money in the system and makes other decisions in line with indicators such as inflation and growth of the economy at large.
The Colombian peso has floated freely against the dollar and other currencies since 25 September 1999, when the Central Bank abandoned the crawling band exchange regime, which acts like a crawling peg. Under that system, the Bank intervened in the market by buying or selling dollars to keep the dollar's price in pesos within the band. Soon after abolition of the band—by December 1999—the peso had depreciated 20 percent from the beginning of the year, increasing the competitiveness of Colombian exports to the United States.
Inflation has always been moderate in Colombia, with peaks in the mid-twenty percent range. By the end of 1999 inflation was 9.2 percent, more than 5 percentage points below the previous year, mainly as a consequence of the recession. The figure for 2000 was 10 percent
|Exchange rates: Colombia|
|Colombian pesos (Col$) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
as consumption reversed the downward trend and the government restrained wage hikes. Despite economic recovery and a slight weakening of the peso, officials were not able to relax monetary policy later in year 2000. Average interest rates were 19.5 percent in 1999 and about 15.3 percent in 2000.
In August 1989 the government authorized plans to return to private ownership 65 percent of the assets of all financial institutions nationalized after the financial crisis of 1987.