Colombian Peso Falls Most in Two Weeks as Government Steps Up Intervention
Colombia’s peso fell the most in two weeks after the government and central bank announced measures to ease the local currency’s rally, including extending dollar purchases and reducing import tariffs.
The peso dropped 0.2 percent to 1,844.30 per U.S. dollar at 2:02 p.m. New York time, from 1,840 yesterday. It earlier fell as much as 0.6 percent, the biggest intraday decline since Oct. 19. Colombian markets were closed yesterday for a holiday.
The government said Oct. 29 that it will buy as much as $3.7 billion through the currency forwards market to hedge foreign debt payments. The same day, central bank chief Jose Dario Uribe said the institution will keep buying a minimum of $20 million a day through auctions until at least March 15, two months longer than previously planned. He also left open the possibility of bigger purchases, saying the bank can buy dollars in the market through a local clearing house “at any time.”
“What they are doing is managing expectations, letting the market know that both the central bank and Finance Ministry can intervene discretionally,” said Benito Berber, an emerging markets currency strategist with Nomura Securities Inc. in New York. “All this reduces the chances the peso will strengthen beyond 1,800...”
Colombian Peso Falls Most in Two Weeks as Government Steps Up Intervention - Bloomberg
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