June 10 (Bloomberg) -- Colombia’s peso climbed to its strongest level against the dollar in almost nine months as the price of oil, the nation’s top export, rose above $71 a barrel.

The peso gained 0.1 percent to 2,053.73 per dollar at 3:30 p.m. New York time, from 2,055.18 yesterday. It touched 2,033.35, its strongest since Sept. 22.

“The gain in commodities and the generalized dollar weakness are leading to a rebalancing of risk, as investors drop the dollar and seek other currencies including the peso,” said Julian Ramirez, head analyst at Bogota-based brokerage Proyectar Valores SA.

Crude oil for July delivery touched $71.79 a barrel on the New York Mercantile Exchange, the highest since October, after a government report showed that U.S. crude and fuel supplies unexpectedly fell. Prices are up 60 percent this year.

Ramirez forecasts the peso will strengthen to 1,800 “around” September. The currency has jumped 7.3 percent in the past month, compared with a 5.8 percent gain in the Brazilian real and a 4.1 percent drop in the Mexican peso.

Finance Minister Oscar Ivan Zuluaga was quoted as saying in an interview published June 8 by La Republica newspaper that the nation should allow the currency to float freely and that carrying out “massive interventions” is picking a futile fight with the market.

‘Outperform’

“While other countries in the region have been intervening directly in the market, in Colombia we haven’t had any signal that is going to happen,” said Ramirez. “That’s helping the peso outperform.”

The yield on the country’s 11 percent bonds due in July 2020 rose nine basis points, or 0.09 percentage point, to 9.45 percent. The price declined 0.637 centavo to 110.339 centavos per peso, according to Colombia’s stock exchange.

The yield on the benchmark bond has jumped 64 basis points in the past month. Ramirez predicts the yield will drop to 8.90 percent by the end of June amid expectations inflation will slow and the central bank will lower the overnight lending rate at its June 19 meeting. He forecasts policy makers this month will cut the key rate a half percentage point to 4.5 percent.

In Peru, the sol declined 0.1 percent to 2.9807 per dollar, from 2.9785 yesterday. The yield on the nation’s 8.6 percent sol-denominated bond due August 2017 climbed three basis points to 5.57 percent, according to Citigroup Inc.

The Chilean peso was little changed at 565.65 per dollar, from 565.75 yesterday. The yield for a basket of the country’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, slid nine basis points to 3.03 percent, according to Bloomberg composite prices.

Argentina’s peso was little changed, dropping to 3.7617 per dollar from 3.7606 yesterday. The yield on Argentina’s inflation-linked peso bonds due in December 2033 rose 16 basis points to 18.26 percent, according to Citigroup Inc.’s local unit.

Venezuela’s bolivar gained 0.1 percent to 6.68 per dollar in the unregulated market from 6.69 yesterday, traders said. The government pegs the currency at an official exchange rate of 2.15 per dollar under restrictions it imposed in 2003.

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: June 10, 2009 16:11 EDT