The Colombian peso appreciated Monday as foreign investors are selling dollars to invest in the country mainly in the oil and mining industries.
The peso strengthened to 1,925 Colombian pesos to the dollar from COP1,936.40 on Friday.
“There are several factors that contribute to the strong peso, the flow of foreign direct investment, the government selling dollars and some large companies readying tax payments,” German Verdugo, a market analyst with local brokerage Correval, said.
The Colombian Central Bank Friday said foreign direct investment during the period between Jan. 1 and Jan. 29 reached $631 million, of which $566 million went to oil and mining industry.
The government is selling dollars it collected from bond sales last year and needs to change into pesos to pay local expenditures, Verdugo said.
The yield on the benchmark Colombian peso-denominated government bonds maturing in 2020 rose to 8.936% from 8.825% on Friday.
On the equity market, the IGBC stock index ended almost unchanged at 11,474.14 points.
The shares of oil company Pacific Rubiales Energy gained 1.7% to COP29,200. (Inti Landauro / Dow Jones)