The Colombian peso on Wednesday hit a one-year low against the peso as government measures to lower the value of the currency seem effective.
In the course of the day, the peso hit the COP1,852.5o mark, its lowest position since January 2012.
The Colombian currency had been decreasing in value since the beginning of the year, months after the Colombian central bank began interventions in the country’s key interest rate and the massive purchase of dollars.
Since January 1, the Colombian currency lost %3.95 in value
According to Dow Jones, the peso’s weakness is derived largely from recent strength in the dollar against a host of currencies as investors bet the U.S. economy will continue to gain speed even as growth in Europe and elsewhere stalls.
The drop coincides with a drop in oil prices worldwide. Colombia is one of Latin America’s largest oil exporters. Additionally, the sector is the largest beneficiary of foreign direct investment.
However, as the peso grew stronger over the past years, economists warned for the “Dutch Disease” and export sectors other than that of oil and mining complained about their competitiveness on the global market.
On Wednesday, Finance Minister Mauricio Cardenas announced the central bank would continue purchasing dollars to keep the peso “competitive.”
MORE: Colombia to continue dollar purchases to keep peso ‘competitive’: Finance Minister