Colombian Peso Jumps to Highest Figure in 3 Weeks

The major currency of Colombia, Colombian Peso increased to a figure that’s the highest in last 3 weeks after companies repatriated Dollars for paying taxes. Apart from that, the slowing inflation in China boosted demand for the higher yielding assets as well. Colombian Peso touched the figure of 1811.05 per USD in intraday trading, marking its strongest level since 20th March. In 2013, the currency has experienced a drop of 2.5%.

Inflation in China eased in March from its 10-month high value. As a result, global stocks increased and oil experienced jumps too. This has reduced pressure on policy makers for tightening credit in this Asian country as economy is expected to recover. The biggest rebel group of Colombia, Revolutionary Armed Forces of Colombia, has started peace talks with the Colombian Government, thereby increasing the demand of the local currency, as stated by the Head of the Currency Trading Department of Corp. Financiera Colombiana, Andres Munoz.

Munoz added further that the global markets are kind of calm on today. There are inflows from the big companies which are also playing its part in pressuring the gains in the Colombian Peso. As far as the peace talks are concerned, things are looking good till this point of time. Hence, the investors are currently getting into a mood of getting rid of their long Dollar positions. It is expected that a long is a bet an asset will be gaining value. Incidentally, according to the forecast made by Munoz, Colombian Peso will be gaining beyond the 1800 mark within the next couple of weeks.

In a post made on Twitter on yesterday, the President of Colombia, Juan Manuel Santos stated there is an opportunity to end the long term conflict with the Revolutionary Armed Forces of Colombia. He acknowledged that there is a long way to go for settling down the things, however, progresses are being made on this direction. The representatives of the Colombian Government are expected to meet the members of the FARC in Cuba pretty soon, in an attempt to end the conflict that has been in existence for the last 5 decades.

As far as the data released by the Central Bank of Colombia is concerned, the yields on the bonds on Colombian Peso which are scheduled to mature in 2024 are more or less unchanged at 4.95%.