This is the first day down since last May 19 it was known that Colombia lost the investment grade.
The exchange rate fell $ 10 and closed this Monday at $ 3,734. This is the first day down since last May 19 it was known that Colombia lost the investment grade.
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On May 19, Standard & Poor’s (S&P) lowered Colombia’s risk rating for long-term debt in foreign currency, from BBB- with a negative outlook to BB + with a stable outlook. Which means that Colombian debt is now in the territory of “junk bonds”: a financial term that refers to debt below investment grade.
Despite the movements in the exchange rate after losing the investment grade, the devaluation of the peso has been relatively moderate for news of this caliber. In fact, the biggest rise in the dollar this year occurred when the withdrawal of the tax reform was announced at the beginning of the month.
For many analysts Standard & Poor’s only made official what the entire market already knew: in fact, a Bloomberg report revealed that Colombian debt in dollars already behaved like junk bonds, similar to that of Guatemala or Uzbekistan, nations that They are three ratings below investment grade. That is, beyond the position of the rating agencies, for investors Colombia had already lost this status.
There is great expectation for the new tax reform that the Government is building through consensus, which at the moment is known to have a collection of $ 14 billion: 10 billion less than the previous reform.
