Colombia’s peso gained against the dollar Monday, continuing a rally that has been boosted by optimism on the economic plans of President Juan Manuel Santos and the central bank’s halt of its dollar-buying program in the spot market.
The peso closed at COP1,808.49 compared with Friday’s rate of COP1,819.9.
Felipe Melo, a currency analyst with Alianza Valores, said that the market is awaiting details on whether the central bank will soon restart its dollar buying program in the spot market, a move which had helped tame the peso’s appreciation.
Investors and traders are “anxious to know if they (the central bank) will start to intervene soon,” Melo said.
The central bank confirmed Monday in a press release that it hadn’t carried any trades in the currency market in July.
In the first half of the year, the central bank bought $1.6 billion. The central bank’s chairman, Jose Dario Uribe, has said that the central bank could resume the dollar purchases at any moment.
The peso has also strengthened because of the planned market-friendly economic policies of Santos, who was sworn in Saturday. His administration has pledged to reduce the government fiscal deficit, which could help Colombia attain investment-grade status for its bonds.
The yield on Colombia’s benchmark 2020 bonds stood Monday at 7.220% from 7.218% on Friday. Colombia’s benchmark IGBC index, meanwhile, was mostly flat, rising 0.09% to close at 13,409 points. (Darcy Crowe / Dow Jones)