The Andean nation aims to cut foreign debt to 22 percent of the total, from 28 percent, over a period of about four years, Cardenas said at an event at the National Federation of Coffee Growers in Bogota today. Colombia will only issue foreign debt to repay other external debt that is maturing, Cardenas said.
“We won’t bring dollars into Colombia,” Cardenas said. “We want to cut external debt so as not to generate exchange rate pressures and to be protected against fluctuations in international markets.”
The government has submitted legislation to Congress that would cut the tax on foreigners’ bond profits to 14 percent from 33 percent, to lure foreign investors to the local debt market. Cardenas said Nov. 19 he expects the law to pass by the end of the year.
The peso has rallied 7.5 percent in the last 12 months, the best performance against the dollar among 25 emerging market currencies tracked by Bloomberg. In trading today, it was little changed at 1814.83 per dollar
The yield on the government bonds due July 2024 was unchanged at 5.98 percent at 3:22 p.m. in Bogota.
As of Oct. 31, 73 percent of Colombia’s $33 billion in external debt is in dollars, 23 percent is in pesos, and 4 percent is in yen, according to the Finance Ministry.
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