Colombian Peso Weakens On Poor GDP Data

Colombian Peso Weakens 1.9% On Poor GDP Data
Fri, Mar 27 2009, 14:14 GMT
http://www.djnewswires.com/eu


Colombian Peso Weakens 1.9% On Poor GDP Data

BOGOTA (Dow Jones)--The Colombian peso weakened strongly at the opening of the session after the release of data showing Colombia's economy slowed sharply in 2008, leading some analysts to say the country is already in a recession.

The Colombian peso traded at COP2,482.10 to the dollar at 9:55 a.m. EDT from COP2,435.99 on Thursday amid an active session that has traded $203 million in just one hour.

Colombia's gross domestic product contracted 0.7% in the fourth quarter of 2008 from the same period a year ago, while full-year growth fell to a 2.5% rate from 7.5% in 2007, the Colombian statistics department DANE said Thursday.

As a result of the poor data, the Colombian Finance Ministry Thursday lowered its target for 2009 gross domestic product growth to between 0.5% and 1.5%, down from a previous 3%.

"Some analysts are saying Colombia is already in recession. We disagree with that projection as we believe the economy probably grew 0.2% in the first quarter of the year," said Jaime Rodriguez, head of research at local brokerage Asesores en Valores.

Julian Cardenas, analyst at the Bogota-based brokerage Corredores Asociados, said Colombia is already in recession, as he expects the economy contracted 0.6% in the first quarter of the year.

"As a result of the surprising data in the fourth quarter, the country's largest banks are demanding dollars," Rodriguez added.

Meanwhile, the local stock market index is up 0.06% to 7,998.89 points.

In the local bond market, the yield on the benchmark domestic paper maturing in 2020 traded at 9.70% as of 9:55 a.m. from 9.620% on Thursday as the government Thursday raised the consolidated budget deficit target for 2009 to the equivalent of 2.3% of GDP.

The previous target for 2009 was the equivalent to 1.8% of GDP.

The government raised its budget deficit target after reducing its economic growth forecast for the year.

By BillBigD on Mar 28, 2009, 06:24 in Friendly Talkzone.

dbldareu says on Mar 29, 2009, 21:41: Yep, it's what I been sayin'...Just wait another 3 months when for the fun to start... DD 0 funny, 0 helpful.

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