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Colombian Peso Reaches Highest Since 1999 on Taxes, Oil Revenue

Colombian Peso Reaches Highest Since 1999 on Taxes, Oil Revenue

By Andrea Jaramillo

April 22 (Bloomberg) -- Colombia's peso reached its highest since July 1999 as rising oil prices boost export revenue.

The peso also advanced as Colombian companies, which pay income taxes between April 18 and June 18, convert profits from foreign markets, according to Manuel Rey, chief analyst at Bogota-based brokerage Asesores en Valores.

``The tax season should continue to pressure the peso in coming weeks,'' Rey said. ``High commodity prices, including oil, should also help maintain the strengthening trend in emerging- market currencies.''

Colombia's peso advanced 0.4 percent to 1,773.05 per dollar at 3:48 p.m. New York time, according to the Colombian foreign- exchange electronic transactions system, known as SET-FX. It touched 1,772.7, the strongest level since July 6, 1999.

Rey forecasts the peso may strengthen to as much as 1,750 within the next month.

Crude oil for May delivery reached a record $119.90 today. The price of oil, Colombia's main export, is up 81 percent from a year ago.

Colombia will maintain limits on the purchase of local assets by foreign investors that have helped limit the peso's appreciation, the Finance Ministry said in a statement late yesterday. The peso has strengthened 19.5 percent in the last year, the second-biggest gain after the Brazilian real among the six-most traded currencies in Latin America.

Colombian Bond

The yield on Colombia's benchmark 11 percent bonds due July 2020 rose 3 basis points, or 0.03 percentage point, to 11.16 percent, according to Colombia's stock exchange. The price dropped 0.201 centavo to 98.878 centavos per peso.

Chile's peso advanced the most since March 26, gaining 1.3 percent to 450.88 per dollar. The central bank bought $50 million for a seventh straight day in the foreign exchange market, at an average price of 454.4 pesos, part of an effort to weaken the currency and bolster exports.

By tejasmarcos on Apr 22, 17:00 in Friendly Talkzone.

tejasmarcos says on Apr 22, 17:00:

this is a little late...

god is in your head

darkangel305 says on Apr 22, 18:53:

is there any chance for the peso to reach 1800 in the next week?

RAAAY says on Apr 22, 20:03:

No.

.........Its useless to argue with ignorance

BillBigD says on Apr 22, 21:27:

I doubt it, but a 1% uptick wouldn't change the trend which is down.

Catfish35 says on Apr 22, 22:44:

So I guess 2000 is out of the question?

"I refuse to have a battle of intelligence with an unarmed person, therefore I will just speak as the simpleton you have come to love"

Rubito says on Apr 23, 07:07:

2000 is a distant memory.

---Violence is the price of freedom.---

BillBigD says on Apr 23, 10:21:

$1764.00 as we speak

kat1 (Moderator) says on Apr 23, 14:15:

when do you think the dollar will pick up again?

BillBigD says on Apr 23, 14:36:

Funny the $ did fine against the EURO and Pound today! But got smoked against both Colombian and the Chile peso.

rocinante says on Apr 23, 14:40:

Pick up against what - the COP? 3 years when when the COP is, and, is perceieved to be overvalued as Chile's peso is now. That overvalue is according to CSFB - not me. I don't know squat about the economy in Chile these days but the concept applies to Colombia - just not any time soon. I bet we see some support for the USD vs the COP 6 - 9 months after the election. Up to 1500/1600 from maybe 1400.

2000 will never be seen again unless the US skyrockets and Colombia falls into a shambles. If Rubito wasn't a musician dressed as cigar chomping pirate he could be my financial advisor.

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Peso 1400 by November" Feb 5, 2008

BillBigD says on Apr 23, 14:51:

Chile's economy is doing great! Just look at the price of copper the last 6 months. Rocinante- I bet we see $2000 again.

Rubito says on Apr 23, 22:40:

I'm taking bets.

---Violence is the price of freedom.---

tomtom33 says on Apr 24, 04:28:

Roci has been right on so far. What booms(the Colombian economy) normally busts, and the US economy will recover. Whether or not that means 2000, I have no idea.

Tinto (Moderator) says on Apr 24, 07:23:

Yep, just like there's a pretty big 'x factor' (new speculative money, index funds, ETFs, ETNs) driving most physical commodity prices well above what might be considered normal given previous supply and demand relationships, there's a big x factor at play with the peso's value, and it's the interest rate differential between Colombia and the US. We've seen 10-15% drops in a matter of days when the speculative money decides to leave commodities, the same could certainly happen with the peso.

Colombia is already subsidizing flowers and other exports because their prices are becoming uncompetitive. I saw in the news a day or two ago that Tejicondor is seeking to sell itself because it can't survive. Are others soon to follow? It may be proven that President Uribe is in deep with the AUC/paracos. Auto sales are down. The bond and stock markets are in a rut. Colombia imports 98% of their wheat and 60-70% of their corn. The strength in the peso has not offset the absolute price rise of those commodities and food prices are high/going higher. In short, I wonder if extremely high prices for oil and coal exports are, for now, masking some of the other cracks in the economy.

BillBigD says on Apr 24, 08:43:

Tinto good comments-----Colombia's stock market is down 10% this year. Investors will stop investing money if the easy money has been made.
EURO DECLINES 1.5% AGAINST DOLLAR, BIGGEST DROP SINCE 2004- today news

Ctg Bound says on Apr 25, 09:31:

kat1,

I expect some bad news will come out to knock the pesos back 10% or so, but then it will carry on going up against the dollar for a while yet.

Ctg Bound says on Apr 25, 09:34:

BillBigD,

The currency markets think that the US interest rate cuts are nearly over, while the EU have not started yet.

I don't believe the EU will cut rates, they keep their eye on the EU inflation rate more than the GDP figures. So unless it looks like a recession is coming in the EU, which I don't see, I doubt the EU will cut their interest rates.

I expect some people are just using it as an excuse to take profits on the Euros gain over the last few months.

kat1 (Moderator) says on Apr 25, 13:23:

ctg bound that means the pound will be affected too?

Robert Jorge says on Apr 25, 23:40:

If 60 to 70% of Colombian corn is imported, they need to find a new source. Colombian corn sucks.

BillBigD says on Apr 26, 12:13:

Some say that the EU is about 6-9 months behind the states. We will see.

Ctg Bound says on Apr 27, 09:59:

kat1,

My view is that the peso will strengthen against the pound, with down dips when some international turbelance appears, like we have seen several times over the last few years.

Ctg Bound says on Apr 27, 10:00:

BillBigD,

Yeah some say that, but I don't see it, as you say we shall see.

BillBigD says on Apr 29, 13:28:

peso-1781.8750 up .14. probably a dead cat bounce