Colombia’s peso fell, ending five straight days of increases, on speculation policy makers may take additional measures to ease gains in the local currency after Brazil escalated efforts to stem a rally in the real.
The peso fell 0.1 percent to 1,769.25 per U.S. dollar, from 1,767 yesterday. The Colombian currency has advanced 10 percent in the past three months, the best performer among 25 emerging- market currencies tracked by Bloomberg.
Brazil today imposed a levy on foreign loans and bonds that mature in three years or less. The 6 percent tax, which takes effect immediately, was previously applied to foreign borrowing of up to two years, according to a decree published today in the official gazette. The South American country is ready to take more measures to stem a rally in the real, Finance Minister Guido Mantega said.
Brazil’s move is “leading to generalized nervousness in the currency market in Latin America,” said Camilo Perez, head analyst at Banco de Bogota SA, the country’s second-biggest bank. “Some may be speculating that if more measures were taken in Brazil, other countries in the region may follow suit.”
In a bid to ease gains in the peso, Colombia’s central bank said Feb. 24 it will extend a program of daily purchases of a minimum of $20 million to at least Aug. 4, from the initially announced minimum three-month period.
The yield on Colombia’s 10 percent peso debt due July 2024 fell two basis points, or 0.02 percentage point, to 7.34 percent, according to the central bank. The price rose 0.136 centavo to 121.066 centavos per peso.
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