Colombia’s peso rose, snapping a
three-day slide, as demand for higher-yielding assets rose after
central banks around the world lowered interest rates and pumped
money into markets in a bid to ease a credit crisis.
Demand for pesos also picked up after Colombia late
yesterday eliminated capital controls on all foreign investment,
including purchases of fixed-income securities, as part of an
effort to halt a three-week rout in the currency.
“The removal of capital controls is an important step,”
said Marc Chandler, head of currency strategy with Brown Brothers
Harriman & Co. in New York. “It might help set the stage for a
quicker recovery in Colombia.”
The peso rose 1.9 percent to 2,267.2 per dollar at
10:31 a.m. in New York, from 2,311 yesterday, according to the
Colombian foreign-exchange electronic transactions system, known
as SET-FX. The peso fell 6.1 percent the prior three days and is
down 8.5 percent in the past month, part of a tumble throughout
emerging markets.
The yield on Colombia’s benchmark 11 percent bonds due in
July 2020 dropped 7 basis points to 12.23 percent, according to
Colombia’s stock exchange.
Chile’s peso rose, rebounding from its biggest drop
yesterday since 1992. The peso rose 1.3 percent to 606.67 per
dollar after having sunk 12.8 percent in the previous nine days.
The yield for a basket of Chile’s five-year peso bonds in
inflation-linked currency units, known as unidades de fomento,
decreased 6 basis points, or 0.06 percentage point, to 2.89
percent, according to Bloomberg composite prices. (Bloomberg)