The dollar in Colombia: from 3,822 to 4,409 pesos in 2024

What is the TRM

The Market Representative Rate (TRM) is the official reference value of the dollar in Colombia. It is calculated and certified by the Financial Superintendence based on the previous day's currency purchase and sale operations. It is used for contracts, declarations, statements, and to convert pesos to dollars in many transactions.

What happened in 2024

According to the Financial Superintendence, with data from the Bank of the Republic, the TRM closed on December 31, 2024, at 4,409.15 pesos per dollar. At the end of 2023, it was 3,822.05. The dollar thus rose 15.36% during the year, which equals a depreciation of the peso against the US currency.

The annual average for 2024 was near 4,072 pesos, according to published calculations, with a yearly low in April or May, depending on the source.

Why the dollar moves

The exchange rate responds to many forces: the price of oil, Colombia's interest rates compared to those of the United States, the country's risk perception, the fiscal situation, and investment and remittance flows. In 2024, for example, Colombia received record remittances of 11.848 billion dollars, a flow that increases the supply of foreign currency.

No one can reliably predict the exchange rate. That’s why, rather than guessing, it’s better to diversify.

Exchange rate risk explained

If a Colombian invests in an asset that generates income in dollars, their result in pesos depends on two things: the asset’s income and the dollar’s movement. If the dollar rises, their income is worth more in pesos; if it falls, it’s worth less. It’s a risk that works both ways.

For an investor living in the United States or Europe, the opposite happens with an asset in Colombia: their income in pesos converts to their currency at the exchange rate at each moment.

• Income in dollars: protects against a peso devaluation.
• Income in pesos: benefits if the peso strengthens.
• A mix of currencies reduces dependence on a single scenario.

How CityFraction handles currencies

At CityFraction, fraction prices are expressed in dollars and you can see your balance in various currencies. Assets operate in dollars (Miami), pesos (Cartagena), and euros (Madrid and Capri). Payments in pesos are converted at the rate at the time of the transaction, which is recorded in your statement.

An example with numbers

Suppose an asset in Miami pays you 10 dollars in income in one month. With an exchange rate (TRM) of 3,822 pesos, those 10 dollars equal 38,220 pesos; with a TRM of 4,409 pesos, they equal 44,090 pesos. The income in dollars was the same, but its value in pesos changed by 15% just due to the exchange rate. The example is illustrative and does not reflect the income of a real asset.

That effect is what many savers seek when diversifying in foreign currency. But it can also work against you: if the peso revalues, the same income in dollars converts to fewer pesos. That’s why it’s better to think of the exchange rate as a risk rather than a bet.

Conclusion

The peso devaluation in 2024 reminded many Colombian savers of the importance of having part of their wealth in other currencies. Fractions of assets in dollars and euros are a way to do this with small amounts, understanding that the exchange rate is also a risk.

• See assets in dollars and euros