Bloomberg News

Colombian Peso Declines as Global Growth Concern Saps Demand

September 28, 2011

Sept. 28 (Bloomberg) -- Colombia’s peso fell for the second day in three as concern that the global economy is slipping into a recession hurt appetite for higher-yielding, emerging-market assets.

The peso plunged 1.5 percent to 1,917.33 per U.S. dollar at 2:16 p.m. New York time, from 1,888.25 yesterday. It touched 1,933 on Sept. 26, its weakest level since December. The peso has slipped 6.4 percent in the past month amid concern Greek insolvency is inevitable and Europe can’t contain the damage.

“Nothing is clear on the international front,” said Juan Camilo Santana, an analyst at Bogota-based brokerage Cia. de Profesionales de Bolsa SA. “We’ve seen a lot of volatility as the market prices in policy expectations, but we have yet to see decisive action.”

European Commission President Jose Barroso today called for faster creation of a rescue fund and said he will press ahead with proposals for common bonds for the euro area. Officials from the European Commission, European Central Bank and International Monetary Fund will return to Athens tomorrow to review the Greek government’s budget-cut plans, the commission said.

The yield on Colombia’s benchmark 10 percent bonds due in July 2024 rose nine basis points, or 0.09 percentage point, to 7.58 percent. The bond’s price fell 0.837 centavo to 119.349 centavos per peso.

--Editors: Glenn J. Kalinoski, Marie-France Han

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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