Is Cheap Dollar Over in Colombia?

I’ve spent more than 15 years watching real-time exchange-rate screens, and one thing still surprises me: people buy dollars when they’re expensive and sell them — or simply don’t buy — when they’re cheap. It’s backwards from how it should work, and August 2026 just handed us the clearest example in years.

Barely three years ago, on January 6, 2023, the dollar touched $4,989.58 COP — a step away from the psychological $5,000 ceiling. On August 31 of this year it closed at $3,205.23. That’s a drop of more than 35%. If at any point between 2023 and mid-this-year you needed dollars — to study abroad, to import, to save in hard currency — and you didn’t buy, yes, you missed the party. There’s no elegant way to say it.

Did we really miss the party?

Partly. But “missing the party” assumes the party is over, and that’s where the analysis gets interesting. The peso entered August with a year-to-date appreciation near 18% — one of the best-performing emerging-market currencies in the world — but in the final week alone it climbed 4.62%. And it wasn’t one day’s noise: it was the convergence of three real things. New Fed Chair Kevin Warsh said flatly at Jackson Hole that “the responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank” — a message the market read as meaning September brings no soft gestures. Oil has fallen for four straight sessions below $87, draining oxygen from the peso. And reconstruction after August’s earthquake, estimated at $30 trillion COP with public debt already at 60.3% of GDP, is adding dollar demand right as supply weakens.

What almost nobody is telling you

Here’s what almost nobody says out loud: Grupo Cibest itself — one of the loudest defenders of the strong-peso thesis through 2026 — has already admitted the currency “has already priced in most of the factors” that strengthened it. Translated: the room left for the dollar to keep falling has already been used up. Its own year-end projection is a range of $3,400 to $3,650 COP — more expensive than today, not cheaper. That doesn’t mean there won’t be another peso rally down the road; there always has been, and there will be again. It means there’s no solid basis for assuming a dollar at $3,100-$3,200 is “the new normal.” It never is. Colombia’s currency market doesn’t have permanent floors or ceilings — it has cycles — and this specific cycle, with elevated US rates, weak oil, and emergency fiscal spending, points the other way.

If cheap dollars don’t come back, now what?

This is where judgment matters more than prediction. I don’t know if the dollar goes back to $3,100 in October or heads to $3,700 before December — nobody knows for certain, and I’d distrust anyone who tells you with full confidence. What I do know, after years of watching treasuries make decisions based on “waiting for the best price,” is that waiting for the bottom almost never beats averaging in. If you have a real dollar need in the next 6 to 12 months — tuition, imports, foreign-currency debt — don’t solve it in a single trade guessing the low. Split the purchase into 3 or 4 tranches over the coming weeks. If you manage corporate treasury, now’s the time to review hedges — forwards, options — not to “beat” the market, but to take the currency variable out of a decision that’s already hard enough on its own. And if your plan was simply “wait for it to drop further,” that plan no longer has the tailwind it had six months ago.

The real question isn’t whether we missed the party. It’s whether we have the judgment to act when the next window opens — without needing someone to confirm, in hindsight, that it was the moment.

If you want to follow this story as it moves, not at month’s end — the Daily Briefing covers it every morning before the market opens, with the number and the why, no filler.

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