Currencies
Fresh Bout of Petro Risk Sparks Rout in Colombia’s Currency
- Peso falls 3% in a month as banks start betting against it
- Central bank easing cycle has made currency less attractive
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For much of Gustavo Petro’s time in office, Colombia’s interest rates have been so high that foreign investors tolerated the sporadic bouts of political tumult that would have normally scared them off.
The nation’s currency — the peso — strengthened against the dollar and local government bonds provided some of the best returns in Latin America in the two years since the leftist president took office. That’s partially because his repeated attempts to upend the nation’s conservative economic model were stymied. But also in large part thanks to rates that, at as high as 13.25%, were far above most of the developing world.