The history of money in Colombia begins with the Spanish colonization, when it began to be introduced in Latin America. Currency exchange was the main mechanism of commerce during colonial times. This practice was carried out through the use of the coins that were being used in Europe at the time of the conquest.
However, the need to manufacture coins with local resources arose, and it is there that the founding of the Casa de la Moneda de Santa Fe de Bogotá takes place, the first mint to manufacture gold coins in Latin America, in 1621.
Mint, Bogotá
After the Independence of Colombia, from 1810 to 1816, the mint suffered a great crisis, caused by low local gold production. This crisis caused a severe shortage of the raw material to mint new currencies, and finance the country in the postwar state.
In 1821, the Spanish colonial, the currency used until then, was replaced by the Colombian real. This new currency was equivalent to the Spanish colonial both in value and in the content of the fine metal used for its manufacture.
In mid-1837, the Colombian real was replaced by the Colombian peso; at that time, one Colombian peso corresponded to 8 reales. Later, in 1847, a Colombian peso would be equivalent to 10 reales.
In 1870, Banco de Bogotá was created, the first private banking institution in Colombia. Later, other banking entities appeared gradually, such as: Banco Popular, Banco de Colombia and Banco de Antioquia, among others.
In 1871 Colombia was part of the gold standard, a monetary system that establishes the value of a currency based on the value of gold at that time. In this sense, the country determined the value of the Colombian peso at a rate equal to five French francs.
This measure considerably strengthened the Colombian economy. However, the strength of this currency only lasted until 1886, as inflation in printing costs induced a devaluation of the currency.
Between 1907 and 1914, the issue of coins equivalent in value to current banknotes was resumed. In 1915 a change occurred in the monetary cone, introducing a new currency known as "Peso Oro", equivalent to 100 old pesos.
In 1923 the Bank of the Republic of Colombia was founded, in charge of controlling the monetary guidelines to be carried out in Colombia to this day. In 1931, just when the United Kingdom decided to abandon the gold standard, Colombia changed its parity with the US dollar.
This induced a slight devaluation in the currency, and the final equivalence was 1 dollar equal to 1.05 gold pesos. Years later, in 1993, the Colombian currency was re-baptized: the surname "Oro" was subtracted and it was renamed only the Colombian peso.
Today, one US dollar is equivalent to approximately 2,976.19 Colombian pesos. Colombia has one of the most robust economies in Latin America.
References
- Colombian peso (2016). Oanda Corporation. New York, USA. Recovered from: oanda.com
- Money and monetary policy (2006). Bank of the Republic. Bogota Colombia. Recovered from: banrep.gov.co
- History of Colombian currency (2016). Recovered from: currency-history.info
- Sánchez, F., Fernández, A. and Armenta, A. (2005). Monetary history of Colombia in the 20th century: Major trends and relevant episodes. University of the Andes. Bogota Colombia. Recovered from: core.ac.uk
- Wikipedia, The Free Encyclopedia (2017). Peso (currency of Colombia). Recovered from: es.wikipedia.org.