Home Colombian News Money, Finance, Economics Colombia’s Peso Falls From Eight-Month High on Decline in Oil
Colombia’s Peso Falls From Eight-Month High on Decline in Oil PDF Print E-mail
Colombian News - Money, Finance, Economics
Tuesday, 06 July 2010 07:05
July 6 (Bloomberg) -- Colombia’s peso fell from an eight- month high following a decline in oil, the nation’s biggest export.

The peso fell 0.3 percent to 1,893.10 per U.S. dollar at 3:29 p.m. New York time, from 1,887.5 yesterday. The currency earlier strengthened to 1,875.3, the highest since Oct. 20, 2009. The peso has jumped 8 percent this year, the best performance among all currencies tracked by Bloomberg. Colombian markets were closed yesterday for a national holiday.

“The market turned around when oil started dropping,” said Julian Ramirez, an analyst at Bogota-based brokerage Proyectar Valores SA. Oil fell as much as 1.5 percent.

Colombia’s peso bonds also erased earlier gains on concern lower demand for higher-yielding emerging-market assets will make the nation’s plans to seek overseas funding more expensive, according to Ramirez.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 rose two basis points, or 0.02 percentage point, to 7.77 percent, according to Colombia’s stock exchange. The bond’s price dropped 0.2 centavo to 121.929 centavos per peso.

“Risk aversion is on the rise again,” said Ramirez.

Colombia will sell an additional $1 billion abroad, of which $500 million will be in overseas bonds and $500 million from multilateral lenders, to replace revenue from the scrapped sale of power company Isagen SA, Finance Minister Oscar Ivan Zuluaga said July 2.

President-elect Juan Manuel Santos, who is slated to take office Aug. 7, won’t sell Isagen, Zuluaga said. The 2010 budget included 4 trillion pesos ($2.13 billion) in revenue from the sale of the power company and five regional electric companies, which may be delayed, he said.

The government will also auction 2 trillion pesos more of local debt, known as TES, this year to cover the gap, Zuluaga said.
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