After 25 years, the Colombian authorities decided to abandon the crawling peg exchange rate policy and implement a regime of nominal exchange rate bands. Initial conditions in Colombia contrast sharply with those of other cases in which bands were part of an ongoing effort to reduce high...

This paper looks into the political economy forces that helped shape exchange rate policy in Colombia since the early 1960s. As witnessed by the remarkable longevity of the managed crawl, Colombian exchange rate policies since 1967 did not take the form of major regime changes. Policy shifts...