Peso continues fall as investors remain worried

Colombia’s peso declined on concerns
the global credit crisis won’t abate soon as the central bank
sold $180 million in dollar options and suspended a daily dollar
buying program.

Colombia’s peso dropped 0.4 percent to 2,265.5 per dollar
at 1:28 p.m. New York time, from 2,255.55 yesterday, according
to the Colombian foreign-exchange electronic transactions
system, known as SET-FX. The peso declined 4 percent yesterday,
triggering the $180 million dollar option auction today, said a
central bank spokeswoman, who wouldn’t be identified by name,
citing the bank’s internal policy.

Future auctions will be determined by the peso’s movement,
while the program to buy $20 million a day has been suspended
until further notice, the spokeswoman said by telephone from

Today’s options auction aims “to add some liquidity and
keep the peso from weakening so much,” said Daniel Arguelles, a
senior foreign exchange trader at the Bogota-based brokerage
Corredores Asociados. “Still, the market remains very risk
averse, and we’re pretty much going tick by tick with whatever
is going on in Brazil and with the stock indexes.”

Brazil’s real declined 4.1 percent, while the Standard &
Poor’s 500 Index fell 2.9 percent.

The yield on Colombia’s benchmark 11 percent bonds due July
2020 rose 1 basis point, or 0.01 percentage point, to 12.05
percent in New York, according to Colombia’s stock exchange. The
bonds’ price slid 0.059 centavos to 93.461 centavos per peso. (BLOOMBERG)

Related posts

War in Ukraine causing surge in poverty in Colombia: UN

Colombia’s wealth gap bogging down economic growth and progress: World Bank

Pandora papers reveal offshore activities of Colombia’s ex-presidents