- Currency gains most among peers amid emerging market rally
- Cardenas says 2,900 level shows Colombia reaching stability
Colombia’s peso strengthened and its bonds reached a five-month high as Finance Minister Mauricio Cardenas said the currency’s recent gains showed the country reaching stability.
The peso added 2.3 percent to 2,902.58 per dollar at 11:36 a.m. in Bogota, and strengthened beyond the 2,900 level for the first time since November. The peso gained the most among 24 emerging-market currencies, rallying along with peers in Latin America as Brazil’s real strengthened 1.9 percent and Mexico’s peso gained 0.7 percent.
Colombia’s currency tumbled 34 percent over the past two years, the fourth-worst performance in emerging markets, as a selloff in oil prices curbed economic growth and sparked forecasts of a record current-account deficit. As crude recovers, the peso gained 9.3 percent this year and this week traders are also seeing a jump in dollar inflows ahead of a corporate tax deadline, according to Francisco Chaves, a strategist at Corredores Davivienda in Bogota. Cardenas says current levels show confidence in Colombia.
“What we’re seeing today first of all shows that the Colombian economy has reached a certain stability,” Cardenas told reporters in Bogota. “But most importantly, the falling price of the dollar will help lead to a faster drop in inflation.”
The yield on Colombia’s benchmark local bonds due in 2024 fell 3 basis points to 7.83 percent, while the price rose to 112.628 centavos per peso, on course for the highest closing price since November.