Colombia’s peso has continued to appreciate against the US dollar, falling to 1,900 pesos on Friday, national media reported.
The Colombia Stock Exchange reported that the Colombian Peso (COP) closed at 1900.90 pesos to the dollar on Thursday, after dipping to a low of 1,898.85 earlier in the day, reported El Tiempo.
The continued appreciation of the COP — which would make Colombian made products more expensive in the international market — has worried the government, business sector, and economic analysts, according to El Espectador.
Experts are attributing the rise of the COP to JP Morgan’s recommendation that investors include more Treasury Securities (TES ) in their portfolios.
Daniel Velandia, director of economic research at the brokerage firm Credicorp Colombia Capital, said that once the Representative Market Rate (official dollar price) dips below 1,900 pesos, a “psychological ” phenomenon can occur, and lead the currency to fall even further to 1,870 or 1,880 pesos in the next few days.
Daniel Lozano, head of economic research at Serfinco told La Republica newspaper that “we are seeing this trend among major currencies of [Latin American], and Colombia has not been immune to this downtrend. The leading factor behind the movement of the exchange rate continues to be the development of international dynamics. ”
According to Lozano, the decline in the exchange rate reflects a change in risk premiums in Latin American countries.