The Colombian peso ended Tuesday above 2,500 pesos to the dollar for
the first time since July 2006 after the Dow Jones Industrial Average
The peso weakened to COP2,501 to the dollar from COP2,461 on Monday.
The peso hadn’t closed that weak since July 19, 2006, when it ended at
“Investors follow the Dow Jones Industrial
Average as a proxy to the world’s economic situation,” said Felipe
Campos, a market analyst with local brokerage Alianza Valores.
He said the flow of dollars into the Colombian economy is likely to dry
out this year as cash from commodity exports will fall because of lower
prices, foreign direct investment will shrink because of the credit
crunch and few foreigners will invest in the Colombian capital markets.
“Since there are few indicators of what is happening with the world economy, local investors follow the DJIA,” Campos said.
The DJIA was recently down more than 340 points Tuesday.
On the Colombian equity market, the benchmark stock index ended 0.3%
lower at 8,053.62 points. Shares of state-controlled oil company
Ecopetrol SA (ECOPETROL.BO) fell 0.5% to COP2,140.
On the debt market, the yield on the benchmark government peso-denominated bond rose to 9.918% from 9.81% on Monday.