25 Centavos – Colombia

In 1979, Colombia's currency situation was characterized by a managed exchange rate regime under the control of the Banco de la República. The country operated a crawling peg system, where the Colombian peso was periodically devalued against the US dollar by small, pre-announced amounts. This policy, established in the late 1960s, aimed to maintain export competitiveness by offsetting higher domestic inflation relative to trading partners, primarily the United States. The system provided a degree of predictability for businesses and helped avoid the sudden shocks associated with large, one-off devaluations.

The economic backdrop was one of relative stability compared to other Latin American nations, yet it faced underlying pressures. Colombia was experiencing a coffee boom, with high international prices following the 1975 Brazilian frost, which generated significant foreign exchange reserves and helped support the peso. However, this reliance on a single commodity created vulnerability. Furthermore, the economy was grappling with persistent, though moderate, inflation (around 25% annually), which necessitated the ongoing mini-devaluations. The external debt was rising but was not yet at the crisis levels that would engulf the region in the 1980s.

Overall, the currency regime in 1979 was in a period of cautious calibration. Authorities were balancing the benefits of a stable, predictable exchange rate for planning against the need to manage inflation and protect the booming coffee sector's earnings. This careful management allowed Colombia to avoid the severe balance-of-payments crises affecting its neighbors, but it was operating within a framework that would soon be tested by the impending Latin American debt crisis, the collapse of the coffee pact, and the shifting global economic landscape of the early 1980s.