The Colombian peso fell on Tuesday after an eight month high following a fall in the price of oil, the country’s biggest export.
The peso fell 0.3% to 1,893.10 per U.S. dollar, following a drop in oil by as much as 1.5%, Bloomberg reports.
The yield on Colombia’s benchmark 11% bonds due July 2020 also rose two basis points to 7.77% and the bond’s price dropped 0.2 centavos to 121.929 centavos per peso.
Following President-elect Juan Manuel Santos‘ decision not to sell a stake of power company Isagen SA, Colombia will sell an additional $1 billion to cover the estimated $1.6 billion loss, which Finance Minister Oscar Ivan Zuluaga said was needed for governent spending in the final quarter of 2010.
Of the extra $1 billion, $500 million will be in overseas bonds and $500 million from multilateral lenders. The government will also auction COP2 trillion more of local debt this year to help cover the gap from not selling its stake in Isagen.