Despite Euro-Dollar Parity, Euro Maintains Higher Price

Despite Euro-Dollar Parity, Euro Maintains Higher Price in Colombia

Despite the global parity between the euro and the dollar, the two most important currencies in the global economy, the European currency continues to be more expensive than the US dollar in Colombian exchange houses.

The euro has experienced a downturn, falling to a 20-year low against the dollar. The depreciation has been incredibly rapid, with the euro trading near US$1.15 in February.

The currency has lost ground against the dollar as the Federal Reserve of the United States increases interest rates to curb inflation. Additionally, the Russian invasion of Ukraine has worsened economic prospects in the eurozone and has increased the cost of energy imports to the region.

Despite the parity, the movement has not yet been reflected in the local market. LR surveyed with 14 exchange houses in Colombia, which sell the dollar at an average of $4,484 and the euro at $4,772, with a difference of $288.

The offices offering the best prices for the sale of the US dollar are Cóndor Cambio de Divisas ($4,450), Latin Cambios ($4,450), and Punto Dollar ($4,485). Meanwhile, those with the best rates if you want to buy euros are Alliance Trade ($4,690) and Cambios Vancouver ($4,730).

The unstable behavior (constant ups and downs) of the dollar and, in turn, the euro ( euro hoy in colombia), is a crucial point for the global currency outlook. Despite this, the free market or exchange rate market in Colombia does not respond to the behavior of ups and downs but to the relationship between supply and demand (or the circulation of currencies) in the country.

Martha Del Pilar Martínez, President of Asoprocambios, assures that although parity has been reached in global indicators, in Colombia, the situation is governed by a considerable shortage of the euro that has been resonating for some time. "There has not been a high circulation of euros in the country, and that has forced all exchange house professionals to buy the euro above the TRM (TRM hoy in Colombia) and in the same way sell it above it."

The directive also assured that this will not be permanent. "In the event of a greater circulation of euros in the market, exchange houses will adjust sales rates to the world's dollar-euro parity."

The shortage of the euro responds to certain factors of global uncertainty that have brought winds of recession to the European economy. According to experts, this shortage is because tourism, one of the main channels of income for the euro to circulate in Colombia, has decreased considerably due to the uncertainty in Europe. This has not been the same behavior as that of the US dollar, which is globally recognized for being a powerhouse consumer despite multiple announcements of an upcoming recession.