The Colombian peso’s steady growth may be over, as the central bank is expected to increase its dollar purchases to stem the currency’s appreciation, in an effort to strengthen exports and boost economic growth, according to Business Week.
The peso has dropped 1% since policy makers started purchasing $20 million a day in March.
Analysts expect the peso to fall by a further 9% against the dollar by the end of the year, after rising to a five month high in early March.
The central bank has pledged to buy around $1.6 billion by the end of June, which would equal 6% of Colombia’s foreign reserves of $25.4 billion.
The rising peso has had dire consequences for Colombia’s export markets.
Flower export company, Grupo Floramerica, has been forced to cut back on staff and research in the last two years due to the strong peso.
Floramerica president Nicolas Nannetti said that he’s been forced to reduce the number of per-hectare workers on his flower fields from 8 to 7.5.
The Association of Colombian Flower Exporters said that the industry has lost 14,000 jobs in the past five years and could lose 12,000 more in companies that have filed for bankruptcy protection.