“Colombian Peso”

definition

The Colombian peso is the official currency of Colombia. Its ISO code is COP, and its symbol is ($). The Colombian central bank, Banco de la República, issues the peso whose value subdivided into 100 centavos.

The history of the peso dates to 1810 when it was introduced to replace the previous currency, the real, with a rate of 1 peso per 8 reals. Later in 1847, the peso was decimalised, with a new ratio of 10 real per peso introduced.

In 1871 Colombia entered the gold standard and pegged the value of the peso to the French Franc at a rate of 1 peso per 5 francs, which soon had to be removed. In 1888 increasing printing costs caused further depreciation to the peso.

In 1903 the Colombian Government established the Junta de Amortización that fixed the value of the paper pesos at a rate of 100 paper pesos per 1 peso oro. In 1915 the new peso notes were introduced with the name of peso oro, that would last in the notes until 1993.

Later, in 1923 the Colombian Government created the Banco de la República to take over the functions of the Junta de Amortización. The new Colombian central bank pegged the peso against the British Pound at a rate of 5 pesos per 1 British Pound.

In 1931, the UK abandoned the gold standard, and the peso was pegged to the U.S. dollar at a rate of 1.05 pesos per dollar, which represented a slight depreciation from the previous peg.

The Colombian peso depreciated further during the Great Depression of 1929 until 1937. From that year until 1959, the peso went through a period of appreciation, buoyed by average yearly inflation rates of 10%, which hampered Colombia´s traditional export activity.

During the second half of the 20th century, the peso went through steady depreciation, except for the coffee boom (1976 – 1979) and the discovery of Cusiana’s oil fields (1991 – 1997).

In the 21st century, the crises of 1999 and 2008  triggered strong devaluations on the Colombian peso, and since 2001, the Colombian Senate has been discussing the possibility of introducing a new peso with a rate of 1,000 current pesos to remove the zeroes from the current peso’s value.