Colombia: Peso weakens in May to lowest level in over one year
May 31, 2013
On 31 May, the Colombian peso (COP) traded at 1,904 per USD, which was 4.3% weaker than in the same day of the previous month. So far this year, the peso has lost 7.7% of its value against the greenback and, currently, it is trading at levels not seen since January 2012.
The peso has been losing value since early this year after the Central Bank and the government took additional steps to weaken the currency in order to protect the country's exports and manufacturing industry. The Central Bank has bought USD 30 million daily since 1 January, which is up from the USD 20 million daily purchases made in 2012. Additionally, the government allowed pension funds to increase investments overseas, a move that will likely increase demand for U.S. dollars.
Economists polled by LatinFocus Consensus Forecast expect the peso to strengthen in the coming months and trade at 1,863 COP per USD by the end of the year. For 2014, the panel projects that the Colombian currency will close the year at 1,854 COP per USD.