Colombian Currency Extends Weekly Decline on Coal Export Concern
Colombia’s peso posted its biggest weekly drop since October amid concern that an interruption of coal exports will reduce the flow of dollars into the country.
The peso depreciated 0.8 percent 1,812.75 per U.S. dollar this week, pushing its decline in 2013 to 2.5 percent. The currency ended today’s session little changed.
“Coal is Colombia’s second-biggest export so what’s going on has a big impact not only in terms of exports but on economic growth,” Daniel Escobar, the head analyst at Global Securities brokerage, said in a phone interview from Bogota. A report showing a manufacturing slowdown in China reduced demand for higher-yielding assets, hurting the peso, he said.
Workers declared a strike Feb. 7 at Cerrejon, Colombia’s biggest coal mine, in a dispute over wages an benefits. A day earlier, authorities suspended the port operating license of Drummond Co., the country’s second-biggest thermal coal producer, after it dumped a mix of water and coal into the sea. Colombia lifted the three-week ban today.
The peso probably won’t weaken much further beyond 1,820, Barclays Plc economist Sebastian Brown wrote in a report today. The currency will “appreciate mildly” over the next three months, he wrote.
Yields on peso bonds due in 2024 fell two basis points, or 0.02 percentage point, to 4.99 percent, according to the central bank. The yields declined to 4.97 percent on Feb. 22, the lowest since the securities were issued in 2009.
To contact the reporter on this story: Andrea Jaramillo in Bogota at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com