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Investment Plan Essay

3568 words - 15 pages

Investment plan

2011

Table of Contents
1. Introduction 3
2. Why the Currencies 4
3. Macro-analysis 5
4.1 The political situation 8
4.2 Investment climate 9
4.3 Threats to the Colombian Market 9
5.4.1 Risks of the fluctuation of the Colombian Peso interest rate 10
5. 3 scenarios 11
5.1 Scenario 1 11
5.2 scenario 2 14
6.3 Scenario 3 15
6. Advice 16
7. Bibliografy 17

1. Introduction
The two currencies that have been chosen for this report are the Colombian peso and the US Dollar. The bank of Utrecht will consider the possible investing situations based on the 3 scenarios presented on these reports with the different hedging techniques and the ...view middle of the document...

Because the currency seems to be gaining strength and won’t trade higher than resistance of $2040.00 Colombian Peso per Dollar and the support level of $1760.00 COP/USD.

Interest Rates, 1995 - 2008 |

The reason why the bank of Utrecht will use the prime interest rate is because the bank of Utrecht is an above average credit worthy partner for other financial institutions and due to that reliability the bank of Utrecht will adhere to the given prime interest rate.

3. Macro-analysis
Indicators - 09/01/2011 |
4.
Inflation |   |   |
Inflation Target | 2.0%-4.0% | |
Annual Inflation
December | 3.17 | |
Real Value Unit (RVU) 09/01/2011 | 190.9350 | |
Interest rates - 09/01/2011 |   |   |
Intervention Rate | 3.00% |   |
Interbank Rate | n.d. | |
Deposits to Fixed Terms (DTF) Rate | 3.50 | |
IBR |   |   |
IBR Overnight
07/01/2011 | 2.961 | |
IBR 1 Month
04/01/2011 | 2.980 | |
Market Exchange Rate - 09/01/2011 |   |   |
Exchange Rate -
09/01/2011 | 1,859.97 | |
Nominal Depreciation – Last 12 months | -5.50 | |

Colombia
The Colombian economy has been growing in a fast pace the last couple of years, with an average of 4% the last couple of years, the economy and the 3rd country that is most invested in South America with an amount of $4.1 billion, behind Brazil ($17.1 billion) and Chile ($ 8 billion), and in front of Peru ($3.4 billion). With the many resources Colombia has, the economy has shown to be resilient, with a stable inflation rate of 2, 3% in the year 2010, which in the long run will mean that Colombia’s economy is steady. Based on what was said above this report will go into other aspects of what makes Colombia the right place to invest right now. Here are some key indicators of Colombia compare to the United States of America.
Country | GDP Billions US$ | GDP Growth | Interest Rate | Inflation Rate | Jobless Rate | Current Account | Exchange Rate |
Colombia | 231 | 1.00% | 3.00% | 2.62% | 12.80% | -1396 | 19.190.000 |
United States | 14256 | 2.60% | 0.25% | 1.10% | 9.40% | -127 | 803.620 |

Colombia has a growing economy as can be seen out of the figures above. The economy is quite similar to that one of Brazil. Like Brazil, Colombia has cheap work force, lot of natural resources and oil and natural gas. What makes Colombia an interesting trade partner to the United States of America in their to strive to be less dependent on rogue economies, like: Venezuala, Iran, etc.
2010 | Ene. | 53,0 | 14,6 |
  | Feb. | 54,6 | 12,6 |
  | Mar. | 54,3 | 11,8 |
  | Abr. | 55,4 | 12,2 |
  | May. | 54,9 | 12,1 |
  | Jun. | 55,2 | 11,6 |
  | Jul. | 54,7 | 12,6 |
  | Ago. | 55,5 | 11,2 |
  | Sep. | 56,6 | 10,6 |
  | Oct. | 57,3 | 10,2 |
  | Nov. | 56,8 | 10,8 |
The Unemployement rate at Colombia has been decreasing steadily in the past decades, coming from 20%! The Colombian economy has shown to be resilient in the economic crisis times and due...

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