Colombia’s peso fell the most in a month as mounting concern that the euro-region debt crisis will spread reduced demand for higher-yielding, emerging-market assets.
The peso slipped 0.6 percent to 1,770.1 per dollar at 2 p.m. New York time, from 1,760.23 on July 8. The peso has jumped 2.7 percent in the past three months, the best performance among 25 emerging-market currencies tracked by Bloomberg.
“The noise surrounding Italy is leading to declines in currencies, including the peso, as they absorb the stress in external markets,” said Andres Munoz, the head currency trader at financial services holding company Corp. Financiera Colombiana in Bogota.
Austrian Finance Minister Maria Fekter said Italy will be discussed today at the monthly gathering of euro-area finance ministers. The regular meeting of European Union President Herman van Rompuy and Commission President Jose Manuel Barroso was enlarged to include ECB President Jean-Claude Trichet, Luxembourg Prime Minister Jean-Claude Juncker and European Economic Commissioner Olli Rehn amid speculation Italy may be engulfed by the crisis and divisions on how to structure aid for Greece.
Colombia’s will avoid capital controls “as far as we can” as it seeks to curb the peso’s gain, Finance Minister Juan Carlos Echeverry said in an interview in New York today.
“The IMF has been talking about capital controls and it’s a question that’s been posed repeatedly to us,” Echeverry said in an interview in New York. “It’s an instrument that we so far have avoided and that we will try to avoid as far as we can.”
The yield on Colombia’s 10 percent bonds due July 2024 rose five basis points, or 0.05 percentage point, to 7.79 percent, according to the stock exchange. The bond’s price declined 0.483 centavo to 117.704 centavos per peso.