The Colombian peso plummeted to a two-month low Tuesday, meaning that the currency has dropped 2.2% so far in April, reports Business Week.
The peso fell to 1,964 to the dollar Tuesday, contradicting the Colombian currency’s strong showing on Monday following the gains in the Brazilian real.
The drop is attributed to the current volatility in European markets amid fears that Greece’s debt crisis could engulf other nations.
Declines in South American markets are “in line with the nervousness [in Europe],” says Camila Estrada, head analyst at Banco de Credito SA.
The fall may be eased by Colombian exporters taking advantage of the weak peso to sell dollars, according to Estrada.
Estrada expects the peso to rise to 1,915 by the end of 2010 oil prices rise due to the global financial recovery.
The Banco de Credito analyst also expected more direct foreign investment to enter Colombia this year.