Colombia’s peso rose for a third month, extending its rally this year to 11.9 percent, as a Royal Bank of Scotland Group Plc report said the country may receive an investment-grade rating by the end of the year.
The peso is the second-best performer this year after Costa Rica’s colon among all currencies tracked by Bloomberg. The peso rose 0.9 percent in August. The currency was little changed today at 1,826.45 per dollar, from 1,826.85 yesterday.
Colombia may receive an investment-grade rating this year as proposed economic laws following the election of President Juan Manuel Santos and an increase in foreign investment boost confidence in the South America country, RBS analysts including Siobhan Morden said today.
“Though real money flows have remained strong over the last 18 months, positive expectations regarding Colombia’s ascension to investment grade have been a more significant driver of currency appreciation over the last five months,” the analysts wrote in the report. “The Santos administration should maintain the crux of the reforms sufficient for the investment- grade ratings,” they said.
The yield on the benchmark 11 percent bonds due 2020 rose two basis points, or 0.02 percentage point, today to 7.1 percent, according to Colombia’s stock exchange. The bond’s price fell 0.178 centavo to 127.031 centavos per peso.