Colombia: Colombian peso appreciates slightly from multi-year low in April
April 14, 2015
The Colombian peso (COP) reversed its course against the U.S. dollar somewhat in recent weeks and appreciated slightly against the dollar after hitting a multi-year low in mid-March. In the first half of March, the Colombian peso continued the trend that had been in place since July of last year and hit a multi-year low of 2,687 COP per USD on 16 March. The depreciation reflects how the low oil price is weighing on the net oil exporters’ growth prospects. Oil accounts for the largest portion of the country’s exports as well as for a notable part of government revenues.
However, the peso appreciated slightly against the U.S. dollar in the second half of March and the beginning of April. On 14 April, the Colombian peso traded at 2,556 COP per USD, which was 4.2% stronger than the reading tallied on the same day of the previous month, but 32.7% weaker compared to the same day last year. The recent appreciation of the Colombian currency mainly reflects a slight weakening of the U.S. dollar resulting from expectations that the Federal Reserve Bank will begin hiking rates later than previously expected, due to concerns over subdued inflation and the strength of the economic recovery in the U.S. In addition, the stabilization in international oil prices in recent weeks also contributed to the slight appreciation of the peso.