The Colombian peso reached its highest level since July 2008 on Friday.
The peso reached COP1,748.89 per U.S. dollar, a 9.6% increase since March 1.
An analyst at the Banco de Bogota SA attributed the strengthening peso to the increase in foreign direct investment in the last few weeks which has been primarily directed towards oil and mining, financial news site Bloomberg reported.
Colombia saw its highest recorded monthly investment in January 2010 at $1.37 billion. According to the bank, June could set the new record, with $1.3 billion invested in the first 24 days. About 86% of that money is going towards oil and mining.
Colombia is South America’s third largest crude oil producer.
An oil analyst at Interbolsa SA, Colombia’s largest stock broker and proprietary trader, explained that “this is a result of new contracts and blocks granted in recent auctions…It comes in stages. After preliminary studies, companies start drilling and investing in infrastructure.”