Colombia’s peso Wednesday climbed to the
highest in almost a month on speculation the worst of the global
banking crisis may be over.
The currency strengthened for a fourth day, gaining 0.6
percent to 2,510.04 per dollar at 11:39 a.m. New York time, from
2,525.88 yesterday. It earlier touched 2,498.15, its highest
level since Feb. 16.
Latin American currencies rose and U.S. stocks rallied after
U.S. Treasury Secretary Timothy Geithner said the government will
use capital injections to spur banks to sell distressed
securities.
“Global markets are reacting strongly to the positive news
and that’s normal in a market that has been dropping so much,”
said Arnoldo Casas, head analyst at Bogota brokerage Cia. de
Profesionales de Bolsa.
The peso also gained as companies sold dollars ahead of tax
payments in March and April, according to Casas. Institutional
investors are also selling dollars after buying Colombian
securities denominated in dollars, he said.
“Institutional investors are selling dollars through
forward contracts to hedge against the currency risk in the
dollar bonds,” said Casas.
The yield on Colombia’s benchmark 11 percent bonds due in
July 2020 fell three basis points, or 0.03 percentage point, to
9.69 percent, according to Colombia’s stock exchange. The price
rose 0.178 centavo to 108.676 centavos per peso. (Bloomberg)
