The Colombian peso weakened Wednesday after the central bank bought dollars on
the foreign-exchange market to control the peso’s appreciation.
The Colombian peso ended at COP2,086.70 on Wednesday from COP2,063 on
Tuesday amid a heavily traded session that exchanged $1.37 billion.
The central bank on Wednesday auctioned $180 million in put options to control the peso appreciation.
The central bank buys dollars through put options any time the
benchmark representative market rate, known as TRM, is more than 5%
above the 20-day moving average. Through those options, the bank aims
to reduce the volatility of the exchange rate.
On Wednesday, Colombia Finance Minister Oscar Ivan Zuluaga said the
Colombian government will evaluate the possibility of intervening
directly on the foreign-exchange market.
“We will study whether the peso’s recent appreciation is temporary or
if this trend requires [the government] to take actions,” Zuluaga told
Caracol radio Wednesday.
The Colombian peso has appreciated 25% in the past three months.
Diego Camacho, head of research at local brokerage Acciones de
Colombia, said the options had a limited effect on the peso and that
the Brazilian real’s weakening was more significant.
The real opened weaker Wednesday, taking its lead from the euro, pound and yen, which had all lost value against the dollar.
On the equity market, the IGBC stock index fell 0.7% to 9312.00 points in a session that traded COP73.6 billion.
The most-heavily traded stock was state-owned oil company Ecopetrol
(ECOPETROL.BO), which fell 1% to COP2,380 amid falling oil future
Earlier Wednesday, Nymex July crude fell $2.43 a barrel, or 3.5%, to settle at $66.12.
On the local bond market, the yield on the benchmark peso-denominated
bond, known as TES, maturing in 2020 ended at 8.995%, from 9.253% on
Tuesday. (Dow Jones)