Colombia’s peso fell, heading for its first weekly drop since November, on speculation policy makers will take further measures to ease the currency’s rally.
The peso weakened 0.1 percent to 1,765.2 per U.S. dollar at 9:48 a.m. in Bogota, and has declined 0.3 percent this week. That’s the first weekly fall since the period ended Nov. 16.
The Colombian currency touched 1,750.50 on Jan 2, the strongest level since July 2011. That day, central bank Governor Jose Dario Uribe said on RCN Radio that the strong peso is a concern and reiterated that Banco de la Republica will buy at least $20 million a day through at least the first quarter. The central bank printed pesos to buy a record $4.4 billion last year.
“Uribe’s comments are leading people to guess we’ll see more intervention,” Camilo Perez, the head analyst at Banco de Bogota SA, said in a phone interview. “There’s also the sense that the rally this week was too strong and it’s not sustainable.”
The central bank might increase daily dollar purchases or extend them should the peso continue to rally, according to Perez.
“Given slowing growth, the central bank is more susceptible to intervene at these levels,” Perez said.
The economy grew 2.1 percent in the third quarter from a year earlier, less than half the 4.9 percent rate in the prior three months, and weaker than all 28 forecasts in a Bloomberg survey. The median estimate was for 3.9 percent expansion.
The yield on the government’s 10 percent peso-denominated debt due in July 2024 rose one basis point, or 0.01 percentage point, to 5.67 percent, according to the central bank.
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