Ecuadorian shoppers flock to southern Colombia to take advantage of the cheap peso
On recent weekends, the streets and parking lots of Ipiales, Colombia are filled with cars and trucks from Ecuador. In a survey taken July 22, the local newspaper reported that 60 percent of the vehicles it counted had Ecuadorian license plates.
“They are coming because of the weakness of the peso against the dollar,” says Paul Ramos, president of the local Chamber of Commerce. “We have always had the Ecuadorians but there are many more now, maybe 50 percent more than before the pandemic.”
Ramos adds: “We are thrilled to see them return since historically the stores here depended on people from Quito and Ibarra for a large part of their sales. “I cannot tell you how much we suffered during the pandemic when they were not allowed to cross the border.”
For Ecuadorian shoppers, most of them from Pichincha and Imbabura Provinces, there are deals to be had in the shops and department stores of Ipiales, a city of about 150,000 across the Rumichaca international bridge from Tulcán. Most products manufactured in Colombia, especially clothing and electronics, are as much as 30 percent cheaper than they were before the Covid-19 pandemic.
The bargains are the result of the weakening Colombian peso versus the U.S. dollar, used by Ecuadorians. In late 2019, the exchange rate was 3,300 pesos to the dollar. On July 26, it was 4,420.
“Our currency weakness is a strength for Ecuadorians,” says Ramos. “Inflation is a terrible burden for many Colombians, since it is almost 10 percent, the highest rate in many years. On the other hand, it is good news for Ecuadorians because they can make purchases at lower prices. It is also good news for the businesses in Ipiales.”
Ecuadorian shoppers report that not all products are discounted. “Anything that is imported into Colombia is about the same price as we pay in Quito,” says Franklin Parra, who makes a monthly shopping trip to Ipiales with his wife. “Prices for the televisions made in China and Korea have increased more than the inflation rate but the televisions made in Medellin are 20 percent cheaper than back home. When you buy, you have to pay attention to which items are made in Colombia.”
He adds that his wife shops mostly for clothing. “She has found prices 30 and 40 percent cheaper than before the Covid.”
To get the most savings, Parra says, it’s important to buy with a credit card. “I almost never use my cards in Quito but here it makes sense because they convert based on the international rate,” he says. “If you exchange dollars on the street, you get fewer pesos. I checked this morning and they were giving 4,000 to the dollar when the real rate is 4,400.”