Colombia’s peso rose to a two-year high on speculation foreign direct investment into oil and mining will continue to boost flows into the South American nation.

The peso gained 0.3 percent to 1,818.35 per U.S. dollar at 2:20 p.m. New York time, from 1,822.98 yesterday. That’s its strongest level on a closing basis since Aug. 8, 2008. The peso has jumped 12.4 percent this year, the best performance among world currencies tracked by Bloomberg.

“The drivers in the currency market are the strong dollar offer from local investors and speculation investment in the oil industry will continue to boost inflows,” said Julian Cardenas, chief economist at Bogota-based brokerage Corredores Asociados SA.

Colombia will attract about $10 billion in foreign direct investment this year, Trade Minister Luis Guillermo Plata has said. The nation received $7.2 billion of foreign-direct investment in 2009 -- of which 80 percent went into oil, coal and mining -- after a record $10.6 billion the previous year, according to the central bank.

Cardenas predicts the central bank will announce daily dollar purchases to ease gains in the currency.

Source: bloomberg.com