- Peso falls most among developing nations; pound worst perfomer
- Oil, Colombia’s main export, traded near $46 a barrel
The Colombian peso posted the biggest decline amid an emerging-market slump as Britain’s decision to exit the European Union roiled markets for a second day, adding to concern about the outlook for the Latin American nation’s economy.
The peso fell 2.8 percent at the close of trading, the worst decline among developing-nation currencies. Sterling depreciated 3.6 percent and earlier reached a three-decade low of $1.3121 that surpassed its weakest levels during the panicked selling on Friday.
Traders’ bets on swings in the peso over the next month are the second-highest in Latin America, and the world’s riskier assets have been under pressure since the U.K. vote raised concerns that an already-fragile global economic recovery will falter as trade snarls in one of the world’s biggest consumer blocs. Colombia’s current account deficit makes it especially vulnerable to the external turmoil and a decline in prices for its oil exports, according to German Cristancho, the head of research at Corredores Davivienda.
“It’s part of the sensitivity that we consider the peso has from the high current account deficit the country has maintained,” Cristancho said. “Today with the fall in oil prices and the increase in risk premiums, it’s normal to see this selloff in the currency.”
The country’s current account deficit, the broadest measure of trade in goods and services, is forecast to end 2016 near the highest in at least 30 years. Colombia exported $969 million of goods to the U.K. in 2015, or 2.3 percent of its total exports, making it the Latin American country most reliant on trade with Britain, according to Bloomberg data.
Oil extended declines to trade near $46 a barrel as the market remained volatile.