The Colombian peso weakened Friday, while the stock market tanked following a general selloff in world markets.
The peso depreciated to 2,398.3 to the dollar as of 9:15 a.m. local
time after hitting COP2,412 earlier in the morning. The peso hasn’t
closed above the COP2,400 threshold since Sept. 26, 2006.
“People are anticipating a strong exit of capitals from the country,”
said Jorge Cortes, a market analyst with local firm Corficolombiana SA.
The Colombian IGBC stock index fell 5.3% to 6,691.58 points as of 9.18
a.m. local time. The index hasn’t closed below 7,000 points since June
14, 2006.
“The market here follows what happens in the world,” Cortes said.
“Additionally, when prices tank, investors who buy with borrowed funds
are forced to sell to guarantee their investments.”
The yield on the 2020 benchmark peso-denominated government bond rose to 13.751%, from 13.381%, its highest close ever. (Dow Jones)