- Currency rebounds from the lowest level in seven weeks
- Oil poised for third weekly decline on signs of global glut
Swings in oil prices sent Colombia’s peso volatility to the highest in the world as the currency rebounded from the lowest level since September.
The peso rose 0.8 percent to 3,048.52 at 12:18 p.m. in Bogota, after slumping to 3,103.60 on Wednesday. One-week implied volatility, reflecting projected shifts in the exchange rate, was 20 percent, the most among 31 major currencies. Oil, which accounted for about half of Colombia’s exports last year, headed for a third weekly decline in New York on signs a global glut will be prolonged as U.S. stockpiles see their longest run of gains in seven months.
“The peso has been super volatile,” said Jose Vicente Romero, an economist at Banco Bilbao Vizcaya Argentaria SA’s Colombia unit. “Today, it’s recovering basically after such high volatility. It’s partly a correction. It’s been a busy week for oil.”
Colombian policy makers have said the central bank will auction call options to limit the volatility in the peso, which has tumbled 30 percent in the past 12 months. The measures weren’t triggered this week. Crude has slumped about 47 percent in that span amid speculation a surplus will persist as the Organization of Petroleum Exporting Countries, threatened by surging output mainly from North America and Russia, continues to pump above its quota.
Projections for the peso’s rate at the end of 2015 range between 3,300 pesos and 2,900 pesos, according to data compiled by Bloomberg.