The Colombian peso defied the Central Bank’s efforts to stem its appreciation, rising to a 5-month high on Monday.
The peso reached a peak of COP1,886.6 to the dollar, its strongest level since October, having closed Friday at 1,896.5.
Bloomberg reports that the currency has appreciated 8.1% so far this year, making it the best performer against the dollar of over 170 currencies tracked by the news agency.
Meanwhile Morgan Stanley, U.S. financial services company, predicted that the peso will continue to rise throughout 2010, due to the high levels of foreign direct investment in Colombia, and the strong performance of its exports.
A Morgan Stanley report said “We suspect that the $1.26 billion intervention announced by the central bank may be no match for our projected trade surplus of 0.1% of gross domestic product or roughly $2.7 billion this year.”
Colombia’s Central Bank on Wednesday announced plans to buy $20 million a day in an attempt to stabilize the currency, causing the peso to close 1.66% down, at 1,927 pesos to the dollar.