Exchange rate

In the month of March of 2001, the average market exchange rate was $2,278.8 pesos per dollar, with an annual nominal devaluation of 4.2%. For the same month, the Real Exchange Rate Index -RERI stood at 119.72 with a slight devaluation of 0.02% during the first quarter 2001. The low real devaluation during the year can be explained by the internal and external components of the RERI. The first one, calculated as the relation between the nominal devaluation and the variation of the producer prices of Colombia, had a negative contribution to the RERI of -0.34 %, due to the fact that the growth of the PPI during the year (4.59 %), was higher than observed nominal devaluation. On the other hand, the external component, measured as the relation between the variation of the external total PPI (1.21 %) and the nominal devaluation of the trade partners (0.84 %), contributed positively in 0.36 % to the real depreciation. Thus, the internal negative contribution was compensated with the external positive contribution, which means, that in Colombia as well as in Colombia's trade partners, the growth of wholesale prices was higher than the nominal depreciation.

REAL EXCHANGE RATE INDEX

*: Up to March.
p: Provisional.
Source: Banco de la República, Economic Studies.