Colombia’s peso will likely strengthen to 1,700 per dollar by year-end as higher commodity prices boost exports, Barclays Capital said.
Barclays revised its year-end peso estimate from 1,800 previously, economist Jimena Zuniga said in a report today.
The Colombian peso is up 14 percent this year, making it the best performer among world currencies tracked by Bloomberg. Banco de la Republica purchased $20 million a day between March 3 and June 30 to curb a rally policy makers said left the peso “misaligned.” Central bank chief Jose Dario Uribe said last month that policy makers haven’t ruled out “intervening in the market again.”
The peso will likely “appreciate further before eliciting a response” from the central bank, Zuniga said in the report. “Embarking on an intervention program at levels that could prove sustainable entails credibility and financial risks. Rather than being in front of an exchange rate that is misaligned relative to its equilibrium, we may (be) in front of a stronger ‘equilibrium’ real exchange rate.”
The peso gained 0.4 percent to 1,801.20 per U.S. dollar today from 1,808.70 yesterday. That’s the strongest level on a closing basis since Aug. 6, 2008. (Andrea Jaramillo / Bloomberg)
