Colombian Peso Depreciates as Cardenas Signals More Intervention
The peso dropped 0.3 percent to 1,819.79 per U.S. dollar at 9:49 a.m. in Bogota. The currency has appreciated 24 percent since the beginning of 2009.
Cardenas said today in Bogota that the peso’s rally is the “mother of all the problems,” making agricultural and industrial exports less competitive. The government is working on a plan to help revive growth that includes currency intervention and excludes capital controls because they “are not effective,” he said yesterday.
“Cardenas has the market pretty scared, although frankly it’s not clear what other currency measures they can take,” said Camilo Perez, the head analyst at Banco de Bogota SA, the nation’s second-biggest bank.
The central bank said Jan. 28 that it will buy at least $30 million a day, bringing purchases in the foreign-exchange market to $3 billion between February and May. Cardenas has also said that the government will buy $1 billion to pay for interest and principal on foreign bonds coming due this year in addition to the $1 billion it will purchase for its oil-stability fund.
Yields on peso bonds maturing in 2024 climbed six basis points, or 0.06 percentage point, to 5.09 percent, according to the central bank. The price fell 0.649 centavos to 141.383 centavos per peso.
The yields have risen 19 basis points this week as investors pared bets the central bank will cut the benchmark overnight lending rate further after an unexpected 50 basis point cut on March 22.
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