One of the issues weighing heavily on the minds of many Colombians has been the sudden fall of the peso. While the devaluation of the national currency against other world currencies began late last year, slipping out of a comfort zone of $2200 COP to the US dollar, many business analysts predicted that the global drop in oil prices couldn’t tarnish one of the hemisphere’s best performing currencies. But many currency traders now stand corrected as February was one of the worst performing months for the peso as it lost even more momentum to the dollar, closing the month near $ 2600: a number not seen since July 2004.

Having lost more than 32 percent of its value against the dollar during the last six months, the peso’s plunge may have pumped much needed funds into the hands of Colombian exporters, while at the same time, punishing importers with an unfavourable exchange rate. Mix into this currency cocktail the continuing fall in the price of crude and you have a recipe for higher than expected inflation. Colombia’s Central Bank released a statement early March after the target of keeping inflation within 2 and 4 percent was missed in February, resulting in 4.36 percent. The reading was the highest since May 2009.

If you can predict the direction of the peso, you probably work with Wall Street and not Main Street. Colombia’s total workforce consists of 21.8 million, according to DANE, the state’s statistical agency. While just over half the nation’s workers can consider themselves formally employed, with steady incomes and receiving social security benefits, an alarming number of Colombians, 48.4 percent, are informal, having to make ends meet, day to day, month to month. For both formal and informal workers, however, the peso’s devaluation has hit wallets hard; especially when budgeting for that new car, home appliances, and even a bottle of Argentine Merlot, which last year in the supermarket cost $20,000 pesos and now $30,000.

Every sector is being pounded by the peso’s volatility, especially the tourism sector. Although, foreign nationals visiting Colombia will find that week in Cartagena more of a “bargain” than ever, it’s the locals who on long weekends, and as Holy Week approaches, must decide on where to spend their hard-earned incomes.

If last year, a round trip ticket to Miami set you back $400 USD ($800,000 COP), that same fare at an exchange rate of 2,650 now costs $1,060.000. A two hundred peso increase may not seem significant when planning that overseas excursion, but if you are a family of four, with many other unaccounted for expenses, then one may have to think twice. “With the state of peso we are going to be locked into our cities,” states Jhon Hernandez, a cabbie in Bogotá, who takes home every month an average “middle class” income of two million pesos. “Even Santa Marta is becoming a luxury destination.”

While it may be trite to blame the peso’s devaluation for the holiday habits of Colombians, the issue runs deeper, especially with banks, who may be forced to cut back on credit as debt and default increases. One of Colombia’s leading banks, Bancolombia, predicts that in 2015, their credit portfolio (cartera) will increase 10 percent. And if bankers are worried about their liquidity, so too, is Colombia’s Central Bank. Having maintained its key lending rate at 4.5 percent during the last six months, the Banco de la Repúbica may push for an increase in the second quarter. A slight increase in interest rates, could squeeze even more the expenditures of many households, and lead to slow down in the construction sector. Many predict that Bogotá’s inflated real estate prices are part of an economic “bubble” waiting to burst.

The peso’s woes is indelibly linked to the low price of oil. And the expected revenue from oil is hardly encouraging, especially for a country which has grown used to growing at 4.6 percent. The government expects to receive in 2015, 9.5 trillion COP or $3.5 billion USD in oil revenue and a 60 perent decline from the 24,5 trillion COP in 2013.

According to a statements by Finance Minister Mauricio Cardenas, the drop in crude prices will continue to hit the oil industry’s royalty payments which fund social benefit programs and infrastructure. According to a report by Reuters, the government has “trimmed” 6 trillion pesos (2.5 billion USD), from this year’s budget “in a bid to scale back nonessential spending.”

While the peso doesn’t look as crumpled as the Russian Ruble, Colombia’s economy will continue to be impacted in the months ahead by its dependency on natural resources and the Saudi’s oil “end game” in which the winner must “take all.” Even, as it now appears, some of the world’s most promising currencies.