Bloomberg News

Colombian Peso Strengthens to Three-Week High on Tax Inflows

April 09, 2013

Colombia’s peso rose to a three-week high as companies repatriated dollars to pay taxes and slowing inflation in China boosted demand for higher-yielding assets.

The peso touched 1,811.05 per dollar in intraday trading, the strongest since March 20. It was up 0.2 percent at 1,812.95 at 9:11 a.m. in Bogota. The currency had dropped 2.5 percent this year.

Global stocks rose and oil rallied after a report from China showed inflation eased last month from a 10-month high, reducing pressure on policy makers to tighten credit in the Asian nation as the economy recovers. Optimism about peace talks with the Revolutionary Armed Forces of Colombia, or FARC, the country’s biggest rebel group, is also helping increase demand for the local currency, according to Andres Munoz, the head currency trader in Bogota at Corp. Financiera Colombiana.

“Global markets are much calmer today and you have the inflows from big companies that are also pressuring gains in the peso,” Munoz said in a phone interview. “Things are looking on the positive side regarding the peace talks so all in all you have investors getting rid of their long dollar positions.”

A long is a bet an asset will gain value. Munoz forecasts the peso will gain beyond 1,800 within the next two weeks.

President Juan Manuel Santos said in a post on Twitter yesterday that “the opportunity to end the conflict, although there is a long way to go, I see it getting closer.” The government is meeting with members of the FARC in Cuba to seek an end to the five-decade-old conflict.

Yields on Colombia’s peso bonds maturing in 2024 were little changed at 4.95 percent, according to the central bank.

To contact the reporter on this story: Andrea Jaramillo in Bogota at

To contact the editor responsible for this story: David Papadopoulos at

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