Colombian peso rises as speculators forsee interest rate freeze

Bloomburg News reports that the Colombian peso rose for the second time Monday as foreign investors anticipate no change in the federal interest rate and as Moody’s raised Colombia’s debt rating.

The peso rose .3% against the dollar, bringing the peso to a 6.7% total increase this year, the strongest of any of the publicly traded currencies in South America.

Colombia’s currency benefits from favorable new debt ratings as Moody’s raised their rating to the lowest investment level on May 31st.  Other South American countries have also had their debt uprated and may be helping to guide foreign investors towards the peso.  On Monday Moody’s also uprated Brazil to Baa-2 the second highest investment level.

Further fueling the appreciation of the peso, the Colombian government is expected by many investors to pause the inflation rate, which could result in large gains from government bonds.

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