Nov. 23 (Bloomberg) -- Chile’s peso climbed the most in two weeks as the price of copper, of which the nation is the world’s top producer, touched a 14-month high.

Chile’s peso rose 1.8 percent to 492.65 per U.S. dollar at 2:56 p.m. New York time, from 501.39 on Nov. 20. The peso has strengthened 8.1 percent in the past month, the best performance against the dollar among 26 emerging-market currencies tracked by Bloomberg. Copper reached the highest intraday price since September 2008.

“Chile doesn’t have the high interest rates, so it’s really a copper, risk appetite story,” said Win Thin, a senior currency strategist at Brown Brothers Harriman & Co. in New York.

Central bank President Jose De Gregorio said Nov. 19 that the bank doesn’t rule out buying dollars in the currency market to stem the peso’s rally. “I don’t get the sense that there is a lot of alarm just yet,” said Thin, who doesn’t expect the central bank to step in before the peso reaches 450 per dollar.

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose 10 basis points, or 0.1 percentage point, to 3.26 percent, according to Bloomberg composite prices.

Colombia’s peso rose 0.2 percent to 1,967.50 per U.S. dollar, from 1,970.85 at the end of last week.

‘Likely Trigger’

Colombia’s central bank will likely buy dollars in the market to weaken the peso should the local currency strengthen beyond 1,900 per U.S. dollar, RBS Securities Inc. strategist Flavia Cattan-Naslausky wrote in a report today.

“Expectation that the Colombian peso is in for another round of rally on the back of risk appetite will likely trigger” central bank action, Cattan-Naslausky wrote in a report from Stamford, Connecticut. “Perhaps less evident as a short-term indicator, but equally important is growth as a measure of the government’s tolerance for appreciation.”

Colombia will likely buy dollars to ease gains in the peso “though capital controls cannot be fully ruled out,” she wrote.

Citigroup Inc. cut its recommendation on Colombian stocks to “neutral” from “overweight” on risks that the nation will introduce capital controls.

“On our recent investor trip to Colombia, it became clear that a new round of controls is very possible,” strategist Geoffrey Dennis wrote in a report today.

Colombian bonds climbed before today’s central bank meeting, at which policy makers are forecast to hold the interbank rate at 4 percent, according to the median estimate in a Bloomberg survey of 33 economists.

Peru Bond Swap

The yield on Colombia’s 11 percent benchmark bonds due in July 2020 fell four basis points to 8.03 percent, according to Colombia’s stock exchange.

Peru’s Finance Ministry today announced an offer to swap bonds due August 2017 and August 2026 for debt due to expire in August 2011. The offer will last until Nov. 25 at 12 p.m. New York time, according to a statement on the ministry’s Web site.

Peru’s sol rose 0.1 percent to 2.8780 per dollar, from 2.8805 at the end of last week. The yield on Peru’s 8.6 percent sol-denominated bond due August 2017 fell one basis point to 5.02 percent, according to Citigroup Inc.’s local unit.

Argentina’s peso rose to its strongest level against the dollar in more than four months. The currency gained 0.1 percent to 3.7963 per dollar from 3.801 on Nov. 20. Earlier today it touched 3.7948, its strongest since July 3.

The yield on the country’s inflation-linked peso bonds due in 2033 slid 15 basis points to 10.74 percent, according to Citibank Argentina.

Venezuela’s bolivar climbed 1.4 percent to 5.45 per dollar in unregulated parallel market trading from 5.53 at the end of last week, traders said. Venezuelans buy dollars in the parallel market when they can’t get government authorization to purchase them at the official exchange rate of 2.15 per dollar.

To contact the reporters on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net; Andrea Jaramillo in Bogota at Ajaramillo1@bloomberg.net

Last Updated: November 23, 2009 15:17 EST