Colombia may reduce spending and use the proceeds to pay down foreign debt as part of the nation’s plan to weaken the local currency, Finance Minister Mauricio Cardenas said.
Colombia is “considering some adjustment in general spending that will allow us to save and use those savings to prepay external debt,” Cardenas said today in an interview with Javeriana Radio.
Gains in the peso are making the nation’s coffee, flower and banana exporters less competitive and hurting job growth in a country with a 9.6 percent unemployment rate, the highest in Latin America. The peso jumped 9.7 percent last year, the biggest gain after the Polish zloty and Hungarian forint among world currencies tracked by Bloomberg.
The peso was little changed at 1,786.87 per U.S. dollar at the close today in Bogota and has declined 1 percent in the past month. It touched 1,750.50 on Jan. 2, the strongest level since July 2011.
The central bank announced Jan. 28 that it will boost daily dollar purchases in the foreign-exchange market to at least $30 million and buy $3 billion between February and May.
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