Colombia’s peso fell the most in two weeks on speculation policy makers may take additional measures to ease gains in the currency after Brazil escalated efforts to stem a rally in the real.
Colombia has room to increase and prolong its “intervention” in the currency market, central bank chief Jose Dario Uribe told reporters yesterday in Punta del Este, Uruguay. Brazil yesterday imposed a levy on foreign loans and bonds that mature in three years or less. The 6 percent tax was previously applied to foreign borrowing of up to two years.
The peso declined 0.3 percent to 1,774 per U.S. dollar, from 1,769.25 yesterday. That’s the biggest drop since Feb. 15. The currency rose 0.1 percent this week and has advanced 9.4 percent in the past three months, the best performer among 25 emerging-market currencies tracked by Bloomberg.
“You have reduced risk appetite, Brazil’s announcement and verbal intervention” by Colombian policy makers, said Daniel Escobar, head analyst at Global Securities brokerage in Bogota. “Unless things deteriorate abroad, the trend for a stronger peso will continue.”
In a bid to ease gains in the peso, Banco de la Republica said Feb. 24 it will extend a program of daily purchases of a minimum of $20 million to at least Aug. 4, from the initially announced minimum three-month period.
The yield on Colombia’s 10 percent peso bonds due July 2024 fell four basis points, or 0.04 percentage point, to 7.30 percent, according to the central bank. The price rose 0.391 centavo to 121.457 centavos per peso.
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