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Post by livinginmedellin on Jul 29, 2016 20:12:55 GMT -5
Colombia's central bank raised its benchmark lending rate to 7.75 percent on Friday despite a still-sluggish economy, as fast-climbing consumer prices put its 2017 inflation target at risk. The seven-member board decided to boost the lending rate by 25 basis points, the 11th consecutive monthly increase, meeting the forecast of 16 out of 22 analysts in a Reuters survey last week. The board's decision was split as some policymakers believe the rate should have been held at 7.5 percent to allow breathing space for the economy, saying increases in consumer prices are seen as temporary. The bank revised down its economic growth forecast for the year to 2.3 percent from 2.5 percent as low oil prices continue to drag national revenue. The government still sees expansion at 3 percent. The market had expected the bank to pause its tightening cycle after last month, but annual inflation accelerated to an unexpectedly high 8.6 percent in June. The increase pushed the rate up a cumulative 325 points since September in an effort to bring inflation within the bank's target range of 2-4 percent next year. The El Nino drought, a 45-day truckers strike which ended last week, and the weakened peso currency have raised food and energy prices, sending inflationary outlooks higher. "Although the phenomenon of El Nino ended and the exchange rate has not shown a strong upward trend for months, the intensity of these shocks produced a deviation of inflation and its expectations from the target and triggered some indexation mechanisms," bank chief Jose Dario Uribe read from the statement. "The effect of the truckers' strike on consumer prices will be felt in July, but is expected to quickly fade." Finance Minister Mauricio Cardenas, who represents the government on the board, said his position to hold the rate was "shared by a group" of board members. While consumer prices are expected to head even closer to 9 percent in July because of the strike, the bank sees inflation heading back toward 6.5 percent at the end of 2016 and to 4 percent next year. "Our sense is that the end of the tightening cycle is near but that a further rise in inflation in July will probably push the board into raising interest rates once more," Capital Economics said in a note to investors. The current account deficit will be 5.3 percent of GDP this year, the bank said. See: www.reuters.com/article/colombia-rates-idUSL1N1AF21Y
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Post by scumbuster on Jul 30, 2016 6:48:48 GMT -5
wow.. anyone know what the current CD rates are? They should go up more. Sure is tempting when they are taking about negative interest rates here in the US.
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Post by wildstubby on Jul 30, 2016 7:03:23 GMT -5
I was looking at interest rates at my credit union yesterday. For 60 mos. CD over $50,000 an APR of 1.78%!!!!!!!! I think I'll find a municipal bond with a non-taxed rate of return!
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Post by livinginmedellin on Jul 30, 2016 8:06:20 GMT -5
wow.. anyone know what the current CD rates are? They should go up more. Sure is tempting when they are taking about negative interest rates here in the US. Some banks in Colombia are currently paying CDT rates of 7.0% or higher depending on the balance for a year CDT. Banco de Occidente is one bank in Colombia that tends to pay a bit higher interest rates than some of the other banks for CDTs. It currently pays 7.8% for a one year CDT with a balance of 1 million to 99 million pesos or 8.1% for 100 million to 499 million. They are paying even higher for a 90 day CDT with an 8.25% annual interest rate paid for a balance of 1 million to 99 million pesos. Here's a link to Banco de Occidente's interest rates: www.bancodeoccidente.com.co/wps/wcm/connect/banco-occidente/9c9ae881-883b-4bca-9200-0117d452e909/banca-personal-tasas-2015.pdf?MOD=AJPERES - CDTs are on page 3. Money I transferred to Colombia back when the exchange rate was over 3,400 pesos to the USD I put in CDTs in Colombia earning over 7.0%. In hindsight considering the exchange rate is now 3,070 pesos to the USD this was a good move. Note that banks in Colombia require a cedula ID to open an account. Each one I talked to when researching CDTs required a cedula. Banco de Bogota wouldn't even open an account with a Temporal Cedula Extranjeria that you get with a TP visa, they would only open with a resident cedula. Also note that banks in Colombia have obscene interest rates for credit cards - if you look in that interest rate list from Banco de Occidente it has an interest rate listed for a Visa Platinum of 30.88%.
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Post by wildstubby on Jul 30, 2016 8:08:55 GMT -5
Not to sound ignorant, but could someone explain to me what exactly is a cedula?
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Post by scumbuster on Jul 30, 2016 8:12:50 GMT -5
A cedula is the Colombian national ID card. Once you have residency your required to get one. Im sure there is a lot more technical explanation.
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Post by dandl93 on Jul 30, 2016 8:13:51 GMT -5
Not to sound ignorant, but could someone explain to me what exactly is a cedula? Basicly it is like a USA Social Security # I like short and sweet some one else can give you the whole break down jajajajajaj
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Post by dandl93 on Jul 30, 2016 8:25:03 GMT -5
The news said a few weeks ago that a new law starting in Aug is that all banks in Colombia has to pay a min of 7% interest on accounts with over 1 million cop.Like anything in Colombia I will beleive it when I see it.
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Post by scumbuster on Jul 30, 2016 8:27:42 GMT -5
If thats the case I would leave it in a checking account so you have easy access. But like you said, believe it when you see it.
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Post by livinginmedellin on Jul 30, 2016 8:48:03 GMT -5
Not to sound ignorant, but could someone explain to me what exactly is a cedula? Basicly it is like a USA Social Security # I like short and sweet some one else can give you the whole break down jajajajajaj A cedula is more like a national version of a State-issued State ID in the US (non drivers license) as a cedula is a photo ID. You can use a cedula to travel for domestic flights in Colombia and leave your passport at home. Having a Colombian cedula ID will make your life easier in Colombia. Pretty much all banks require a cedula to open an account. Plus a cedula makes it easier to open accounts for TV, Internet and phone services. After you have received one of the many visas Colombia offers (other than a tourist visa) you will have a maximum of 15 calendar days to register your visa with Migración Colombia and apply for a cedula extranjeria. The cedula extranjeria will have the same expiration date as your visa. When you receive a new visa you will need a new cedula that will have the same cedula number. Note that a cedula de extranjeria for foreigners can have the exact same number as a cedula de ciudadanía for Colombian citizens. For example I know my cedula de extranjeria number is the same number as a cedula de ciudadanía for a Colombian citzen living in Bogotá. In my experience this can cause problems with some systems used in stores in Colombia when they don't distinguish between cedula de extranjeria and cedula de ciudadanía.
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Post by elexpatriado on Jul 30, 2016 9:17:24 GMT -5
I dont know why Colombia is being odd man out when it comes to interest rates and austerity, compared to rest of world
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Post by wildstubby on Jul 30, 2016 9:24:18 GMT -5
Thanks folks. You know, for as 'progressive' as the US is, when it comes to a National ID, the left are fanatical about even the slightest inclination! Yet, in left, albeit some socialist LA countries, this is a typical thing without any complaints, (other than the aforementioned dual number assignment). Now, as an investor, if I read (or heard), the rules and regs. correctly, I am only allowed to take, in any capital gains or profit the equivalent of $150,000 USD out of Colombia or am I wrong here?
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Post by dandl93 on Jul 30, 2016 9:52:48 GMT -5
Basicly it is like a USA Social Security # I like short and sweet some one else can give you the whole break down jajajajajaj A cedula is more like a national version of a State-issued State ID in the US (non drivers license) as a cedula is a photo ID. You can use a cedula to travel for domestic flights in Colombia and leave your passport at home. Having a Colombian cedula ID will make your life easier in Colombia. Pretty much all banks require a cedula to open an account. Plus a cedula makes it easier to open accounts for TV, Internet and phone services. After you have received one of the many visas Colombia offers (other than a tourist visa) you will have a maximum of 15 calendar days to register your visa with Migración Colombia and apply for a cedula extranjeria. The cedula extranjeria will have the same expiration date as your visa. When you receive a new visa you will need a new cedula that will have the same cedula number. Note that a cedula de extranjeria for foreigners can have the exact same number as a cedula de ciudadanía for Colombian citizens. For example I know my cedula de extranjeria number is the same number as a cedula de ciudadanía for a Colombian citzen living in Bogotá. In my experience this can cause problems with some systems used in stores in Colombia when they don't distinguish between cedula de extranjeria and cedula de ciudadanía. LIM you should go and fix your cedula Extranjeros Cedulas start with a letter E with 6 # Colombian cedulas have no letters and min of 8 #.I seldom use the E and just give the 6 #s except on legal docs.I have had a few people over the years tell me I didnt give them enough # I just say it is Extranjero # and it is good enough.
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Post by scumbuster on Jul 30, 2016 9:57:20 GMT -5
wildstubby Im not sure your exact question, but if your asking in general can you take your Colombian money back out of Colombia there are a few ways. 1 being an ATM like ant US bank account. My bancolombia debit card works here in the US to withdraw funds from my Colombian account. Also if you want to get more creative there is bitcoin. buy in COP and sell in USD.
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Post by scumbuster on Jul 30, 2016 10:05:55 GMT -5
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Post by livinginmedellin on Jul 30, 2016 10:10:22 GMT -5
A cedula is more like a national version of a State-issued State ID in the US (non drivers license) as a cedula is a photo ID. You can use a cedula to travel for domestic flights in Colombia and leave your passport at home. Having a Colombian cedula ID will make your life easier in Colombia. Pretty much all banks require a cedula to open an account. Plus a cedula makes it easier to open accounts for TV, Internet and phone services. After you have received one of the many visas Colombia offers (other than a tourist visa) you will have a maximum of 15 calendar days to register your visa with Migración Colombia and apply for a cedula extranjeria. The cedula extranjeria will have the same expiration date as your visa. When you receive a new visa you will need a new cedula that will have the same cedula number. Note that a cedula de extranjeria for foreigners can have the exact same number as a cedula de ciudadanía for Colombian citizens. For example I know my cedula de extranjeria number is the same number as a cedula de ciudadanía for a Colombian citzen living in Bogotá. In my experience this can cause problems with some systems used in stores in Colombia when they don't distinguish between cedula de extranjeria and cedula de ciudadanía. LIM you should go and fix your cedula Extranjeros Cedulas start with a letter E with 6 # Colombian cedulas have no letters and min of 8 #.I seldom use the E and just give the 6 #s except on legal docs.I have had a few people over the years tell me I didnt give them enough # I just say it is Extranjero # and it is good enough. My cedula extranjeria doesn't have an E before the number and I have a temporal cedula extranjeria. It's the same 6 digit number I have had for over 3 years. When I signed up for Exito puntos, when they entered my 6 digit cedula extranjeria number into their system they already had a guy in Bogotá with the same number with a cedula ciudadanía. I suspect this is possibly due to Colombian cedula numbers with preceding zeros (i.e. 00567345), which can show up a only 6 digits in some IT systems used by stores that use numbers instead of characters in IT systems. To solve the problem at Exito they added 300 before my cedula extranjeria number in their system. So I have a 9 digit cedula number in Exito's system. Also ran into this same problem at Homecenter. But no problems encountered at banks that have better IT systems.
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Post by Deleted on Jul 30, 2016 10:13:33 GMT -5
I was looking at interest rates at my credit union yesterday. For 60 mos. CD over $50,000 an APR of 1.78%!!!!!!!! I think I'll find a municipal bond with a non-taxed rate of return! CDT interest rates of 7% in Colombia sound good on the surface, but not so good when the inflation rate is 8% or more-actually a negative real return. Your real returns may be higher in the US with the relative low inflation.
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Post by dandl93 on Jul 30, 2016 10:25:57 GMT -5
@lim I just pulled up my cedula from 10 years ago it has the E + 6# my current cedula I got 3 years ago it is Perm Res and they did drop off the E it only has my original 6 #.With that said you still need to go and get this fixed letting people just add or subtract # to get by, can bite you royaly from credit to taxes.
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Post by coolcoil on Jul 30, 2016 10:47:23 GMT -5
The other thing to keep in mind with CD in Colombia is that you will pay the 0.4% transaction tax when you cash it in. I'm not sure if you also have to pay the tax if you transfer money from your bank account to the CD. This really bites you in the butt when you take out a short-term CD. A few years ago, my wife put money in a three-month CD and gained 1% interest during that period. However, when she cashed it in, the effective interest rate was only 0.6% after the transaction tax.
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Post by Deleted on Jul 30, 2016 10:51:21 GMT -5
The other thing to keep in mind with CD in Colombia is that you will pay the 0.4% transaction tax when you cash it in. I'm not sure if you also have to pay the tax if you transfer money from your bank account to the CD. This really bites you in the butt when you take out a short-term CD. A few years ago, my wife put money in a three-month CD and gained 1% interest during that period. However, when she cashed it in, the effective interest rate was only 0.6% after the transaction tax. I transferred money from one colombian bank to another directly and did not have to pay the .4%.
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Post by scumbuster on Jul 30, 2016 10:56:24 GMT -5
The other thing to keep in mind with CD in Colombia is that you will pay the 0.4% transaction tax when you cash it in. I'm not sure if you also have to pay the tax if you transfer money from your bank account to the CD. This really bites you in the butt when you take out a short-term CD. A few years ago, my wife put money in a three-month CD and gained 1% interest during that period. However, when she cashed it in, the effective interest rate was only 0.6% after the transaction tax. I transferred money from one colombian bank to another directly and did not have to pay the .4%. This was my understanding also. I investigated CDTs a while back and this was explained, but I took with a grain of salt because I figured until I actually tried it I wouldn't be sure
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Post by livinginmedellin on Jul 30, 2016 11:07:50 GMT -5
@lim I just pulled up my cedula from 10 years ago it has the E + 6# my current cedula I got 3 years ago it is Perm Res and they did drop off the E it only has my original 6 #.With that said you still need to go and get this fixed letting people just add or subtract # to get by, can bite you royaly from credit to taxes. Fortunately the banks, DIAN for taxes, the credit reporting system in Colombia, and telcos like Claro for triple play services all have better IT systems that distinguish between cedula extranjeria and cedula de ciudadanía in my experience. When I renewed my cedula last year I told them about the problem I had experienced with Exito and Migracion Colombia said there is nothing they can do. They said they are aware of this and if they changed my cedula number it is possible to run into the same problem again. I only experienced a problem at stores like Exito and Homecenter, which must have less sophisticated IT systems.
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Post by wildstubby on Jul 30, 2016 18:39:57 GMT -5
scumbuster , I thought you could only remove ≈$150,000.00 USD out of the Colombian economy per year. Anything more, would have to be re-invested back into Colombia. Whereby preventing foreign agencies from controlling their economy, or so I am led to believe!
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