The Colombian peso soared to an eight-month high Tuesday and is up 8.4% this year, which is the largest rise out of any world currency tracked by Bloomberg.
The peso rose to 1,883 to the dollar Tuesday following an announcement by the Colombian Central Bank that it intends to end daily dollar purchases.
The increase was also put down to President-elect Juan Manuel Santos‘ decision to not sell a stake of power company Isagen SA. He is likely to instead sell bonds and obtain overseas loans for government spending.
“If Isagen isn’t sold, the government will probably opt for external financing, which implies bringing in more dollars,” said Daniel Velandia of Bogota firm Correval SA.
Funds from the sale of the power company were expected to be in the region of $1.6 billion, which Finance Minister Oscar Ivan Zuluaga said was needed for governent spending in the final quarter of 2010.