WHAT IS THE DOLLAR PREPARING FOR 2022?

Welcome my dear friends of Leofinance, in this opportunity I would like to address with you a topic of vital importance for society in general, in this year that has just begun we will see what are the forecasted expectations concerning the dollar.

At the end of this year, the dollar managed to reach $4,000 again, an amount that exceeded the Market Representative Rate (MRR), this forecast was seen approximately seven times during the past 2021. For the beginning of this year 2022, a similar behavior is predicted for the currency.

After a thorough research, experts deliberated on the dollar's performance for 2022, which is expected to settle in a range between $3,700 and $4,400. Some prevailing views even point to the currency reaching $4,700.

The largest variation of the dollar is expected approximately in the second quarter of the year when the results of the Colombian elections will be known. For many experts, what happens to the currency in the second half of the year will depend on how the market reacts to the political transformations of the new president.

It is also expected that the peso will tend to devaluate and this devaluation could be greatly affected as in Peru and Chile last year if the electoral results were won by the left, however, it is expected that the local currency will eventually recover.

Analyst Ramon Morell, market expert at Skilling, mentions that in some way we could see a return to safe haven assets, which would improve the dollar and take it to higher levels in which the $4,000 barrier would be constantly surpassed, on the other hand, the Colombian peso could suffer a hard blow if the government succeeds in increasing the minimum wage by 10%, which would increase the concerns of the Colombian society about the growth of inflation and the adjustment of fiscal expenditures.

This would certainly not only affect Colombia, considering that other countries such as Venezuela, which has been going through a great economic crisis for some years now, as well as shortages of some basic foodstuffs and medicines, which normally arrive through the borders with Colombia.

This without taking into account that all these inputs arrive with a considerable increase for travel expenses and freight of large and small traders who distribute them and added to this the rise of the dollar and the peso will radically shake these countries

It is worth noting that for the second half of the year, the United States and its monetary policy will continue to set the course of the currency, even though adjustments in the tightening and almost discounted interest rate increases may be a potential explanation for a moderate revaluation of currencies where emerging countries such as Colombia will be taken into account.

No doubt economic stability for this year is a challenge, countries and society in general will have to plan strategies to help sustain it. The global economy will surpass $100 trillion for the first time in 2022, universal Gross Domestic Product (GDP) will be boosted by the continued recovery from the pandemic, but it should be noted that if inflation persists it will be difficult for political leaders to prevent their economies from sliding back into recession.

What is of vital importance is to see how the world economies will deal with inflation, it is really expected to be a modest adjustment, that manages to put under control the non-transitory elements, this in order to avoid that in the coming years we face a recession, the year 2022 is a year to prepare ourselves objectively to face the economy of the coming years.