Colombia’s peso advanced to the highest level in a week as companies bought the currency before tax payments this month and amid rising investment inflows to the country.
The peso appreciated 0.4 percent to 1,769.20 per U.S. dollar today in Bogota, from 1,775.66 yesterday. It earlier touched 1,764.51, the strongest level since March 27. The currency has rallied 9.6 percent this year in the best performance among the six most-traded Latin America currencies tracked by Bloomberg.
“We continue to see flows into mining and oil, helping the peso regain its strengthening trend,” said Omar Escorcia, an analyst in Bogota at Asesores en Valores, a brokerage.
The peso touched a six-week low on March 29, a day after Finance Minister Juan Carlos Echeverry said the central bank should consider boosting dollar purchases and study possible “surprise” moves to halt the currency’s advance.
Central bank chief Jose Dario Uribe said in an interview yesterday with W Radio that the bank’s board members all want a “more devalued peso” and that measures to ease gains are taken when the benefit outweighs the costs. To stem the pace of the local currency’s appreciation, the central bank has said it will purchase a minimum of $20 million daily in the spot market until at least Aug. 4.
Policy makers get “increasingly uncomfortable” when the peso nears 1,750 per dollar, Escorcia said.
Colombia’s peso bonds rose for a third day as speculation inflation slowed last month helped boost demand for the fixed- rate securities.
The yield on Colombia’s 10 percent peso-denominated debt due in July 2024 fell two basis points, or 0.02 percentage point, to 7.21 percent, according to the central bank. The price rose 0.173 centavo to 122.194 centavos per peso.
Consumer prices rose 0.3 percent in March after increasing 0.6 percent in the previous month, according to the median estimate of 28 economists surveyed by Bloomberg. The national statistics agency is due to release the monthly inflation report tomorrow.
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