The currency and the internal public debt of Colombia devalued on Wednesday due to political uncertainty after the president, Gustavo Petro, requested the formal resignation of all his ministers amid difficulties in the process and approval of a reform to the health system in The congress.
The currency fell 1.67% to 4,587.31 units per dollar in the first hour of business.
For their part, the 10-year internal public debt securities, the TES maturing until February 2033, depreciated at a yield of 11.739%, compared to Tuesday’s close of 11.4250%.
Petro requested the resignation of his 18 ministers to carry out a reorganization of his government team, at a time when the president is struggling with decisive political, economic and social reforms in Congress.
The president’s decision was made known after the debate session on the controversial health reform was lifted in the House of Representatives on Tuesday night because it did not meet the necessary quorum, amid threats from some parties in the Government coalition not to approve the original project.
“The depreciation at this time is all idiosyncratic, what the latest news generates is once again that uncertainty that had dropped a bit at the political level and especially while waiting for confirmation from the Minister of Finance on whether or not he is leaving“, said Sergio OlarteChief Economist for Colombia at Scotiabank.
A source from the Presidency and another from the Ministry of Finance told Reuters that the head of that portfolio, José Antonio Ocampo, would continue in office.
On the stock market, the MSCI COLCAP stock index fell a modest 0.14% to 1,195.93 points.
“The political coalition agreed as a majority has endedPetro announced Tuesday night, complicating the landscape for his reforms.
The president, the first left-wing president in the country’s history, had a coalition in Congress that approved a tax reform last year and aimed in general terms at endorsing the current projects, but the Liberal, U and Conservative announced that they would not vote on the health reform proposed by the Government.
However, some lawmakers are against attempts by their party leaders to control their votes on the reform.
Eighteen lawmakers from the Liberal Party said in an open letter to their leader, former President César Gaviria, that no agreement had been reached so that everyone would vote the same way.
In addition to the health reform, Petro is promoting a project in Congress to change the labor law and another to modify the pension system.
Source: Reuters
Source: Gestion
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