:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/43KQLNPWITADCIFA434PJDP7JA.jpg "The Minister of Finance and analysts have confirmed that the Colombian financial system has not been affected by the banking crisis in the United States 1")
the crisis of some banks in the United Statesamong them the Bank of Silicon Valley of California, generated uncertainty around the world and Colombia was no stranger to it. However, there is tranquility in the national financial system, according to what the national government said through the Minister of Finance, Jose Antonio Ocampoand the Financial monitoring.
The manager did an analysis of the situation and said that it it will pass very quickly and assured that it does not impact the Colombian market much.
He even assured that he did not understand how a small peso devaluation on March 15, because there was no reason, although all Latin American currencies were affected on that day, like others around the world.
“Here in Colombia, we have no financial risk. We have a very strong financial system, we have much better financial standards, even better than in the United States. We have discovered at this point that this matter does not concern us,” he said.
He specified that there is a very specific problem which generates the rupture of the Bank of Silicon Valley, with the exception of deposit withdrawals. In this regard, he pointed out that in the United States, these banks do not have to update the Financial assets.
“When interest rates rose, all securities fell in price, that is, all stocks of government debt bonds. It needed to be updated and they ended up with an imbalance. Here banks have to update the market value. It is a difference that, curiously, we have discovered that this regulation is much stronger in Colombia than in the United States,” he added.
In view of the new decisions of the Federal Reserve (Fed) on the interest rate (4.50 to 4.75% real)indicated that he will have to take the situation into account, so we will see if that makes them say that the rate is not increasing.
“In any case, the United States government is already acting and talking about improving the regulationlike Colombia did and it’s a curious thing, because there the biggest banks are very regulated, but the medium ones, like the ones that are bankrupt, are the ones that have had regulatory problems”, remarked Ocampo.
Likewise, the Financial Superintendence of Colombia indicated that no significant effect was found on financial entities in Colombian territory after the insolvency of the Bank of Silicon Valley.
He pointed out that the Colombian credit companiess did not have any products hosted in the bank’s system, so Colombians should not worry about the insolvency of this bank in the state of California.
He also indicated that it was not found that the private pension fund managers (AFP) Colombian retirement savings were housed there.
“There are no direct investments in SVB. In the portfolio, there are no operations with an SVB counterparty, nor in Fintech companies, private equity funds or related venture capital,” the Superintendency added.
He also noted that the Colombian bank it is qualified to manage resources in situations of liquidity crisis, which was one of the reasons for the insolvency of the SVB. However, he called on small and medium-sized businesses to continue to monitor foreign investment in the stock market, especially in the United States.
For his part, the economist alexander rivers, senior analyst at Inverxia, explained that with this situation, the dollar in Colombia is in a range between $4,700 and $4,800.
According to him, as a result of what is happening with Bank of Silicon Valley and other entities, in the intervention processes that fed guaranteeing deposits to the savers of this bank, not to the investors, but to the savers, it is estimated that this will act as a kind of monetary stimulus and generates at least a feeling of monetary stimulus or monetary support.
Furthermore, that this corresponds fairly well to the data of US inflation which turned out to be in line with expectations (6.4% interannual) and which causes the market to anticipate a lower ceiling for interest rates.
“Until last week, the market was trading with interest rate expectations for the middle of this year versus the Fed around 5.75%. The market traded Monday and Tuesday with the rate cap of the Fed at 5.25%, 50 basis points lower than last week, which indicates that the market anticipates that there are less inflationary pressures and apart from that, the whole context of Silicon Valley is Bank which was rightly being pressured by interest rates,” he said.
So, Ríos added, this could lead the Fed to have two reasonss to conduct such an aggressive monetary policy of raising rates only beyond 5.2% or 5.25%
Likewise, he recalled that interest rates are the mechanism that affects the Colombian bonds you all Colombian exchange rate. So this is where, when the external interest rate is reduced, external upward pressures on the Colombian exchange rate are reduced, which is governed by both internal and external elements.
“You could say there is a clash of forces. What’s happening on the outside is a moderation in those bullish short-term rate expectations, which means the dollar doesn’t have the strength to rise as strongly towards $4,900 or $5,000 as it did one might expect. But, internally, the whole political question and the legislative agenda are making noise on the issue of debt securities that generate strong inflows and outflows of Colombian dollars, that is to say a lot of volatility in this exchange of flow,” he pointed out. . .
Thus, the main analyst of Inverxia concluded that there is then a clash of forces which leads the dollar in Colombia to find a floor more or less around the $4,700 or $4,800 for this week.