The Colombian peso continued to rally against the dollar, closing Thursday at COP1,819 as bets that a strong economic recovery and a surge in foreign investment keep boosting the currency.
The peso is now at a two-year high against the dollar and has outpaced other Latin American currencies. The stronger peso, a reflection of a boom in oil and mining, could hurt other exporters who are likely to start pressuring the government to intervene.
The central bank in the first half of the year purchased dollars in the spot market in a bid to tame the peso’s appreciation and amass more international reserves. Several analysts believe that if the peso continues to strengthen, the central bank may soon announce that it will restart its dollar-buying program.
Colombia’s benchmark stock index, meanwhile, gained 0.65% and closed 13,486 points. The index was boosted by shares of state-controlled oil company Ecopetrol SA, which gained 4.23% to COP3,450.
The stock has rallied on the company’s plans to purchase, with Canada’s Talisman Energy Inc., the Colombian assets of BP PLC for $1.9 billion. Analysts believe that the purchase will allow Ecopetrol to quickly increase output and generate more revenue.
The yield on Colombian benchmark 2020 bond stood at 7.330% after opening at 7.340%. (Darcy Crowe / Dow Jones)
