Colombia’s central bank has ruled out the prospect of it making any intervention if the peso continues to weaken, reported Reuters on Tuesday.
Juan Jose Echavarria, governor of Colombia’s central bank, said if the peso deprecates by even 10 to 15 percent, the bank wont intervene.
As the dollar has strengthened with the help of the United States Federal Reserve, the Colombian peso was among a handful of emerging currencies that have taken a hit, though currencies in Mexico, Argentina, Turkey and South Africa felt a much sharper drop.
Near the end of December and into January, the peso was at a steady increase, partly because Colombia’s primary export, oil, increased in price.
In the period of a month, the U.S. dollar lost more than 5% of its value against Colombia’s peso.
But anxieties about the currency have been renewed in recent months as the dollar has strengthened, oil prices have dipped globally and fears have emerged about Turkey’s Lira crisis dragging down emerging currencies like Colombia’s.
But Echavarria Tuesday said, despite the devaluation, he does not envision raising interest rates this year or the next.
“Even if we have a devaluation of 10 or 15 percent,” he told Reuters. “10 percent (devaluation) is no problem at all.”