The Colombian peso appreciated 18.3% against the dollar in 2025, ranking as the fourth strongest emerging currency of the year. This strength was driven by a globally weakened dollar and local factors like remittances and exports. The exchange rate dropped from a high of $4,416.69 in April to a low of $3,706.94 in December.
In 2025, the US dollar underwent one of its sharpest declines in a decade, with the DXY index falling nearly 9%, according to Juan Pablo Vieira, CEO of JP Tactical Trading. This boosted several emerging currencies, led by the Russian ruble at 48.5% appreciation, followed by the Hungarian forint (22.6%), Czech koruna (19%), and Colombian peso (18.3%). In Latin America, the Mexican peso rose 15%, Peruvian sol 11.4%, Brazilian real 11%, and Chilean peso 10.8%, while the Turkish lira dropped 17.5% and Argentine peso 29%.
In Colombia, the dollar did not exceed $4,000 since September 4 ($4,002.86), breaking below $3,900 and hitting $3,719.60 on November 14, closing the year at $3,706.94 on December 25. The annual high was $4,416.69 on April 10. Catalina Tobón, head of strategy at Skandia, credited this appreciation to rising remittances, external debt monetizations, coffee exports, offshore investment flows, and local rate hike expectations, alongside global dollar weakness.
External factors like geopolitical tensions—US bombings in Iran, deterrence against Venezuela, the Ukraine war, and Middle East conflicts—coupled with Federal Reserve rate cuts, Donald Trump's tariffs, and US government shutdowns, fueled volatility. David Cubides, chief economist at Banco de Occidente, outlined two phases: a contained 5% appreciation in the first half and 10% in the second.
While gold solidified as a safe haven, rising inversely to the dollar, the peso's strength diminished remittance purchasing power ($13 billion projected by Anif) and hurt exporters. Analysts like Laura Fajardo view it as an orderly correction, advising against selling dollars now but favoring purchases of dollar-denominated services, such as preparations for the 2026 World Cup. Paula Chaves of HFM noted a 15% revaluation within a $3,690 to $4,450 range.
