The Colombian peso is unlikely to depreciate much more and should trade around the COP1,900 level, Colombia Finance Minister Juan Carlos Echeverry told Dow Jones Newswires Thursday.
“I was not that happy with the peso in the 1,700 [to the dollar] area and now that it is around 1,900 I think that’s where the equilibrium is…it’s good for exporters, with people that compete with imports, so I’m not unhappy with what has happened,” he said in an interview on the sidelines of a conference on emerging markets.
The Colombian peso weakened sharply against the U.S. dollar to end Wednesday’s session at 1,918.75 to the dollar from COP1,889.00 a day earlier. Renewed worries over Europe’s sovereign-debt woes have resulted in a dearth of demand for Colombian pesos.
Speaking ahead of the Colombian central bank’s policy decision Friday, Echeverry said the current 4.5% level of interest rates was at the low end of the “neutral” level.
But he added that because the global economic situation remains uncertain, “we will have to consider whether to pause like we did last month.”
“For the time being we have been going from an expansionary policy towards a neutral policy, which I think is the right thing to do in Colombia,” he said.