Well nobody has mentioned it , but it has become so obvious, I am going to finally make a post , even though I have avoided it, like going to the doctor to.get updated on your potential cáncer diagnósis .
The subject is exchange rates.
As I have.said often, the main reason for the strong peso is the high interest rates, with a secondary reason being.high remitenances from .overseas, driven by record high cocaine production ( connect the dots).
It has very little to do with a weak dollar as the Peso has skyrocketed in comparison to almost every currency, some worse than the US dollar . As a matter of fact, in the past year , it is the second strongest currency in the OECD, which comprises 38 countries, including all the rich countries.
The Peso has been strenghthening through most of Petros reign and has continued to strengthen after the election, probably because people believe Espriella's government will try to reduce the fiscal deficit , and reduce the risk of a further credit downgrade, thus attracting more passive investors to those juicy 10% to 13% annual government bonds, CDTs and other government backed short to médium term fixed income.
I am not positing this to argue or discuss why the Peso is so strong and where it is going. I personally believe it is way over valued , and things are out of wack, despite the high interest rates and massive increase in laundered money.
But I have been wrong for over a year now, and could very well be wrong well in the future.
So , I have 2 questions for members.
1. How many of you Expats ( not occaisional multi week visitors) have local long term Peso based income to rely on?
2. For you actual expats who spend more than 5 or 6 months a year here,have a permanent residency of some sort and are exclusively or mostly reliant on overseas income, at what point are you going to pull up stakes and go somewhere else.?
Note that most of Ecuador is now substantially cheaper than Colombia, and Cuenca, for example is a beautiful, safe city.
The subject is exchange rates.
As I have.said often, the main reason for the strong peso is the high interest rates, with a secondary reason being.high remitenances from .overseas, driven by record high cocaine production ( connect the dots).
It has very little to do with a weak dollar as the Peso has skyrocketed in comparison to almost every currency, some worse than the US dollar . As a matter of fact, in the past year , it is the second strongest currency in the OECD, which comprises 38 countries, including all the rich countries.
The Peso has been strenghthening through most of Petros reign and has continued to strengthen after the election, probably because people believe Espriella's government will try to reduce the fiscal deficit , and reduce the risk of a further credit downgrade, thus attracting more passive investors to those juicy 10% to 13% annual government bonds, CDTs and other government backed short to médium term fixed income.
I am not positing this to argue or discuss why the Peso is so strong and where it is going. I personally believe it is way over valued , and things are out of wack, despite the high interest rates and massive increase in laundered money.
But I have been wrong for over a year now, and could very well be wrong well in the future.
So , I have 2 questions for members.
1. How many of you Expats ( not occaisional multi week visitors) have local long term Peso based income to rely on?
2. For you actual expats who spend more than 5 or 6 months a year here,have a permanent residency of some sort and are exclusively or mostly reliant on overseas income, at what point are you going to pull up stakes and go somewhere else.?
Note that most of Ecuador is now substantially cheaper than Colombia, and Cuenca, for example is a beautiful, safe city.
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