Peso weakens 4% on US, European bank crisis

The Colombian peso Monday lost 3.8% against the dollar after investors
sold Colombian assets following concerns about the unfolding banking
crisis in the U.S. and Europe.

The peso traded at 2,180 Colombian pesos to the dollar as of 8:40 local time compared with COP2,097.90 on Friday.

The banking troubles “generated even more nervousness in Latin American
markets,” Camilo Perez, head of research at the country’s second
largest bank Banco de Bogota said.

Late Sunday, Netherlands, Belgium and Luxembourg agreed to inject
EUR11.2 billion into Fortis NV (30086.AE) after talks with potential
buyers failed. The U.K. government, meanwhile, moved to nationalize
struggling lender Bradford & Bingley, the second British bank to be
taken under government control this year. Germany’s Hypo Real Estate,
one of Europe’s largest real-estate lenders, was bailed out by a
consortium of other German financial institutions.

Meanwhile U.S. legislators were set to vote as early as Monday on the
latest version of the financial system bailout plan, details of which
congressional leaders worked out over the weekend.

In the local bond market, the yield on the benchmark domestic paper
maturing in 2020 rose to 12.080% as of 9:41 local time from 11.852% on
Friday. (Dow Jones)

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