The Colombian peso strengthened to COP1,992.90 against the dollar on Monday, from COP1,997 at Friday’s close, ahead of this week’s central bank meeting.
Most traders and analysts expect the bank’s board to leave rates unchanged when it meets on Friday. This, and the expectation of increased foreign investment flows into Colombia in 2010 is underpinning the peso’s strength, market sources said.
“Taking into account recent good news, and the investment flows, we could see the dollar around COP1,980 by the end of the week,” said Julian Ujueta, an analyst at local brokerage Suma Valores.
“Friday’s central bank decision will have a big influence. If we see an aggressive stance by the bank, there’ll be a lot of volatility. If not, the end of the year will be quiet,” Ujueta added.
On the debt markets, the yield on the benchmark peso-denominated government bond maturing in 2020 is at 8.087%, down from the 8.141% on Friday.
The benchmark IGBC stock index was almost unchanged at 11540.18, up 0.02% on Friday’s close. The most traded stock was state-owned telephone company Empresa de Telecommunicaciones de Bogota SA, which rose 1.38%.
(Dow Jones)
