As Colombian Peso Drops, Central Bank Prepares to Intervene

  • Cenbank calls foreign-exchange call options auction for Friday
  • First auction under intervention program announced in October

Colombian central bank’s will offer dollars as the peso joins an emerging-market slump driven by speculation the Federal Reserve will raise interest rates as soon as June.

Colombia’s peso dropped 1 percent to 3,057.32 per dollar in Bogota on Thursday trading, prompting the official rate, or TRM, reported by the financial regulator to drop to 3,056.06. The drop in the TRM rate prompted the central bank to offer dollars for the first time under the intervention program announced in October.

The central bank called an auction for 8:30 a.m. on Friday, where it will seek to sell $500 million of call options, according to a statement on its website. The currency’s official rate ended up less than one peso away in Wednesday trading from triggering the auctions.

The currency has plunged 37 percent in the past two years as the plunge in oil prices swelled the country’s current account deficit to a record and damped economic growth. It’s still up 3.8 percent this year, the fourth-best performance among 24 emerging-market currencies tracked by Bloomberg, as crude rebounded.

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