The Colombian peso retreated Thursday as the central bank continued its policy of intervening in the spot market in a bid to rein in currency’s appreciation.
The peso closed at COP1,810.15 to the dollar from COP1,807.1 a day earlier, weakening for a second straight day after the central bank outlined its plan to buy a minimum of $20 million daily over at least the next four months.
On Thursday the central bank purchased $20.1 million in the spot market at a rate of COP1,812.15. “The market has been extremely calm and stable,” said Edgar Romero, an analyst with local brokerage firm Ultrabursatiles.
The central bank “will need to be more aggressive to continue weakening the peso,” Romero added. “Buying $20 million daily is not enough,” he said.
In the fist six months of the year the central bank purchased $1.6 billion, a move designed to help contain the peso’s appreciation. The peso has gained 13% so far this year and ranks as one of the top-performing currencies in the world.
Some analysts have said that the central bank will need to implement additional measures to push down the peso. An idea being floated is capital controls, but Finance Minister Juan Carlos Echeverry stated this week that this was something the government wasn’t considering.
The yield on Colombia’s benchmark 2020 peso-denominated bond stood at 7.175% from Wednesday’s yield of 7.273%.
The IGBC stock index, the country’s benchmark, declined 0.06% to 14,086.69 points. Shares of state-run oil firm Ecopetrol SA fell 0.28% to COP3,550. (Darcy Crowe / Dow Jones Newswires)
