Colombian Peso Falls on Dollar Purchase Plan, Reduced Issuance
Colombia’s peso fell for the first time in five days as the government scaled back plans for foreign debt sales and said it will buy $1 billion as part of its bid to ease gains in the local currency.
The peso weakened 0.2 percent to 1,782 per U.S. dollar at 9:01 a.m. in Bogota. The currency has dropped 0.9 percent this year as the government and central bank announced increased dollar purchases to stem a rally that sent the peso to a 17- month high on Jan. 2.
Colombia will sell $600 million in foreign bonds in the remainder of this year after issuing $1 billion of notes last month, Finance Minister Mauricio Cardenas told reporters in Bogota yesterday. The total is down 38 percent from the $2.6 billion the government had said it would issue.
The Finance Ministry also said yesterday its 2013 financing needs were reduced by 1.8 trillion pesos ($1 billion) after a Feb. 8 domestic debt exchange with public entities. The government will buy that amount in dollars in the currency market to pay for interest and principal on foreign bonds coming due this year, Cardenas said yesterday.
The dollar purchases add to Banco de la Republica’s Jan. 28 announcement that it will buy at least $30 million a day, bringing purchases in the foreign-exchange market to $3 billion between February and May. A stronger peso curbs exporters’ profit margins.
The yield on Colombia’s peso-denominated bonds due in 2024 fell three basis points, or 0.03 percentage point, to 5.04 percent, according to the central bank. The price rose 0.273 centavo to 142.252 centavos per peso.
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