June 4 (Bloomberg) -- Colombia’s peso rose the most in two months as companies bought the currency before local tax payments this month.
The peso advanced 0.7 percent to 1,817.25 per U.S. dollar. That’s the biggest gain on a closing basis since April 2. The currency plunged 3.6 percent in May, its biggest monthly drop since November, as the deepening European debt crisis discouraged appetite for Colombia’s assets. It’s still up 6.7 percent this year, the best performance among all currencies tracked by Bloomberg.
“Companies have been preparing to pay taxes by bringing in dollars” and selling them in the local market, said Daniel Velandia, the head analyst at Correval SA brokerage in Bogota. Companies are scheduled to pay taxes between June 8 and June 25.
The local currency also rose following gains in the euro after European leaders agreed to discuss closer banking cooperation in the euro bloc. European Commission President Jose Barroso and German Chancellor Angela Merkel agreed to discuss proposals on banking coordination at a meeting today in Berlin.
The yield on Colombia’s 10 percent peso-denominated debt due July 2024 fell four basis points, or 0.04 percentage point, to 7.1 percent, according to the central bank. The price rose 0.313 centavo to 123.046 centavos per peso.
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