Feb. 24 (Bloomberg) -- Colombia’s peso touched a six-month high before the central bank raised interest rates today and as oil, the nation’s biggest export, gained.
The peso climbed as much as 0.6 percent to 1,765.80 per U.S. dollar, the strongest intraday level since Aug. 17, before ending the day up less than 0.1 percent at 1,775.75. The peso rose 0.2 percent in the past five days for the eighth straight week of gains, the longest streak since the period ended June 1, 2007.
Policy makers increased the overnight lending rate to 5.25 percent today after the peso ended trading, as forecast by 22 of 36 economists surveyed by Bloomberg. Oil advanced for a seventh day, the longest winning streak since January 2010, on signs of economic recovery from the U.S. to Germany. Crude accounts for about 40 percent of Colombia’s sales abroad.
“Oil is a big part of Colombia’s exports, so when it gains not only does it imply stronger inflows but it makes the peso more attractive as a commodity currency,” said Daniel Lozano, an analyst at Serfinco SA brokerage in Bogota.
The yield on the government’s 10 percent peso bonds due July 2024 fell two basis points, or 0.02 percentage point, to 7.37 percent, according to the central bank. The price rose 0.133 centavo to 120.879 centavos per peso. Trading ended before the central bank’s rate decision.
--Editors: Lester Pimentel, Brendan Walsh
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