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What is the Colombian peso (COP)?

Credit Ratings & Outlook

In the latest credit ratings from December 1970, Moody's gives Colombia a Baa3 rating, with a stable outlook. Fitch has a stable outlook with a BBB- rating. Finally, S&P last issued a BBB- rating, with a stable outlook.

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

Central Bank Rate

The current central bank interest rate is 5.25%. This is higher than 2011, which was 4.75%.

GDP

In 2010 the total GDP was $288,885,551,849 in US Dollars, while the per capita GDP was $6,240. It grew by 4.00% over the previous year.

Unemployment

The latest unemployment rate for 2011 is 9.70%.

Consumer Price Index

The latest consumer price index for 2010 is 125.53.

Political Structure

The current head of the government is President Juan Manuel Santos, who is also the head of state (in an executive role).

Currency Details

The Colombian peso is the official currency of Colombia, often denoted by COP, or less formally, COL$. The available denominations for bills are $1K, $2K, $5K, $10K, $20K, and $50K, and for coins, are $50, $100, $200, $500 and $1000. A particularly interesting story lies behind the $1000 coin, which was issued in early 1997: counterfeiting of this coin reached such extremes that, at its peak, the number of false coins in Colombia outweighed the number of legitimate ones. For this reason, the $1000 coin was temporarily removed from circulation in 2002, and then reintroduced with a new-more imitation resistant-design.

The peso was fixed against the United States Dollar for a period of time (at 1036 pesos in 1996 and 1140 in 1997), but in September 1999 the nation’s central bank decided to let the peso float. This decision allowed for central bank intervention in the exchange market to be limited to achieving their balance of payment goals and inflation targets, in turn, providing a more stable exchange rate environment.

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

What does it look like?

Political Structure

The Republic of Colombia, which gained independence from Spain in 1810, is divided into 32 departments and one capital district. The government is comprised of three branches: the executive, administrative, and judicial branches. The President and Vice President, who are elected by the popular vote for a four-year term, lead the executive branch. The legislature is made up of a 102-member Senate and a 166-member House of Representatives. Finally, The Supreme Court of Justice is the main constituent of the judicial branch. Justices are elected by their peers to serve eight-year terms.

Prominent Figures

The current President of Colombia (as of mid 2005) is Alvaro Uribe Velez, and the current Vice President is Francisco Santos. They were elected in 2002 and will be eligible to run for re-election in 2006. The central bank in Colombia is El Banco de la Republica, and is run by the following Board of Directors: Alberto Carasquilla Barrera, Carlos Gustavo Cano Sanz, Juan Mario Laserna Jaramillo, Leonardo Villar Gomez, Jose Dario Uribe Escobar, Juan Jose Echavarria Sotto, Fernando Tenjo Galarza.

Unique Characteristics

Colombia is the largest producer of cocaine in the world, a business that helps sustain local farmers throughout the republics. The lives of these local farmers have found such profound dependence on cocaine that coco (cocaine in its earlier stages) replaces the peso as a form of payment for everyday transactions in regions with a heavy concentration of cocaine farms. The cocaine base is weighed accordingly and the excess amount is given back as change.

Beginning during the Clinton administration, the U.S. has made efforts to assist Colombia in the fight against drug production. A $1.3 billion aid package was granted to Colombia for military items in the war on drugs. In addition, the U.S. has 300 military advisers in Colombia to train Colombia’s anti-drug battalions.

Key Economic Factors Consumer Price Index:

The CPI is the official measurement of inflation that shows the change in price levels for given periods of time consumed by households. The components of the CPI that include health, education and clothing prices usually show less substantial changes, signifying that the increases in inflation are results of high oil prices.

Gross Domestic Product

CColombia has been troubled with political violence since the beginning of the republic in 1819. Violence reduced significantly in the 60s, when liberals and conservatives compromised deals. Between that time and the late 90s, Colombia had the second-highest growth rate in all of Latin America.The liberalization of the economy in the late 90s led to a consumption boom. Later, monetary tightening led to Colombia’s recession in 1998-99. In recent years, the leadership of President Alvaro Uribe has boosted confidencein the economy for foreign investors. Confidence in Colombia will create a higher demand for the Colombian currency, which in turn can greatly expand the economy.One of Colombia’s major exports is oil, which means that they rely heavily on OPEC and increasing crude oil prices. More importantly, the United States is one of their major suppliers and thus maintaining good relations is equally as important.Colombia has been increasing its exports yearly. 2004 saw exports increase by 24%, and imports have also risen by almost 20%.

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