What will happen to your pocket if you remove three zeros by weight?
This is a normal conversation, which could occur in any store in Colombia where people, to simplify the language, decide to make their accounts by taking three zeroes from Colombian money. So things, a bus ticket in Bogota would cost 1.7 pesos. The water bill in a home in Bogotá stratum 5 would arrive for 180 pesos for the two months. Making a fortnightly market for a couple without children with food, soap, grains, milk, soft drinks, breads, packages, would have a value of 300 pesos.
It would happen with the figures of other things that we consume. An outing to eat as a family would be worth around 130 pesos in the restaurant, with the service included. The brand new mid-range car would cost about $ 40,000, the middle class housing would be between $ 200,000 and $ 400,000, depending on the city and the sector. Imagine that today’s minimum wage does not have the three zeros. This would be 781,242 pesos, read 781 pesos with 242 cents.
Attorney General of the Nation, who dusted off one of the initiatives that has had the most noise in recent years: eliminate three zeroes to the Colombian peso. According to the official, this would require digging up money from the coves of illegal Colombian activity. Immediately the voices of the government heard in favor of the initiative, such as that of the Finance Minister, Mauricio Cárdenas, who does not bring good memories of the project. According to the high official, the tentative figure of the change is $ 800,000 million. The account can be much smaller, since the Bank of the Republic believes that the process of replacing existing coins and notes with others with the new value can occur naturally, because it takes away the wear.
The support from the academy
The National Association of Financial Institutions (ANIF), in one of its recent economic comments had already highlighted the possibility that Colombia would have a monetary reform. “The alleged cost of producing new banknotes has been over-mentioned. In fact, these are rotating rapidly and their replacement by new denominations occurs naturally in horizons as short as two years, “said the entity.
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According to the center of economic thought, the marginal cost of this reform is limited to the minting of new coins to allow the cents to trade after the elimination of the three zeros. In other words, the costs of replacing banknotes their software and educational campaigns are much lower compared to the benefits of transactional ease when eliminating the three zeros.
The Santos administration in 2006-2007 made a new attempt that failed quickly. Then, the former finance minister, Juan Carlos launched a proposal in 2011, with the support of Senator Antonio Guerra and the Board of Directors of the Bank of the Republic. The initiative collapsed in Congress despite the fact that the Bank of the Republic explained that it had the new designs and everything ready to make the conversion. However, the cost of the process was again, the main obstacle.
He also highlighted that Colombia is one of the few countries in the region that does not handle figures of a few digits in its economy. It does occur in Mexico, Chile or Brazil to name countries that use less zeros in their legal currency. This is because Colombia did not have hyperinflation in the 1980s that forced its authorities to change the value of their currency.
Another impact, that of tributes
Personal Finance investigated a bit of legislative activity and found that there are laws in progress or approved that ask to include in their next bills and coins new tributes to people or institutions.