On Wednesday, reports centered
on the ongoing crisis over global oil prices and its impact on Colombia’s
current account deficit. The combination of low oil prices and strong domestic
demand drove the country’s current account deficit up from 4.7% this time a
year ago to 6.6% today. However, outside investors expect Colombia’s current
account deficit to improve in 2016 thanks to stabilizing oil prices and reduced
volatility in the value of the Colombian peso.
Also on Wednesday, the Colombian peso registered
its biggest gain since November 3 when it climbed 3% to 3,213.70 per dollar. As
has been the case for the last two years, the peso tacked with the price of
oil. A rally in crude oil prices similarly drove up the value of the Colombian
peso. Bloomberg however noted that the peso was also helped by the Colombian
government’s decision to raise the minimum price for its January 13 sale of
state-controlled power company Isagen S.A.
Nonetheless, the Colombian government has been forced to
scramble for new revenue as a result of the total collapse in global oil
prices. Colombia, despite being a strongly conservative country, has even
started investigating
the possibility of launching a regulated online gambling market. As oil
accounts for 40% of Colombia’s exports, the government must now cast around for
new revenue streams to replace oil.
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