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Colombia's Peso Drops Most in 6 Weeks on Bank Dollar Purchases

By Andrea Jaramillo

June 23 (Bloomberg) -- Colombia's peso dropped the most in six weeks after the central bank said that starting tomorrow it will buy $20 million in the spot market to ease the local currency's appreciation.

Banco de la Republica will buy the U.S. dollar through competitive auctions, the bank said in a statement late June 20. The purchases replace the $150 million in dollar put options the bank sold monthly. Policy makers also said they ``unanimously'' decided to leave the key lending rate unchanged at 9.75 percent, matching the forecast of 23 of 39 economists surveyed by Bloomberg.

The peso fell 1.2 percent to 1,694.85 per dollar at 9:57 a.m. in New York, from 1,675 on June 20, according to the Colombian foreign-exchange electronic transactions system, known as SET-FX. Earlier, it declined as much as 1.73 percent, its biggest decline since May 7.

The yield on Colombia's benchmark 11 percent bonds due July 2020 fell 11 basis points, or 0.11 percentage point, to 12.03 percent, according to Colombia's stock exchange. The bonds' price rose 0.654 centavo to 93.558 centavos per peso.

By tasco66 on Jun 23, 2008, 09:16 in Friendly Talkzone.

morphus says on Jun 23, 2008, 10:29:

The dollar and the Euro jumped back up against the COP - 1.00 USD = 1,724.00 COP /1.00 EUR = 2,674.10 COP

Lets hope the peso bubble bursts. I like my Colombians war-torn and hungry.

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tomtom33 says on Jun 23, 2008, 10:44:

Dame mas gasolina, Morph.

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BillBigD says on Jun 23, 2008, 12:05:

$1727COP right now

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bickerss says on Jun 23, 2008, 12:18:

awsome!!

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Saltador says on Jun 23, 2008, 12:36:

Guess the Colombian government doesn't understand economics. They need to read a few posts here on PBH.

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wendell13 says on Jun 23, 2008, 12:59:

Simon...go dollar!!

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tomtom33 says on Jun 23, 2008, 13:26:

That is a former novia, Sanch. I just changed the photo because I got complaints that she looks too young.

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goin_south says on Jun 23, 2008, 13:49:

tomtom,... she looks FINE; it's you, that looks too _ _ _ !
Well.... I think everyone can fill in the blank ;-))

I'D RATHER BE.........IN COLOMBIA :-)).... (No Quiero Conozco Gustav)

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tomtom33 says on Jun 23, 2008, 14:03:

Tienes razón, GS.

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pedro says on Jun 23, 2008, 14:25:

LOL Morph!

Nobody does deadpan quite as well as you.

que nota!

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Buongone says on Jun 23, 2008, 14:36:

Possibly-the Yank returns !!

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billyb says on Jun 24, 2008, 06:22:

Nobody's happier than the prepagos ;)

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Saltador says on Jun 24, 2008, 07:21:

Dollar dead cat bouncing all the way up to 1750 today...that's 100 off it's low of a week or so ago..let's hope it keeps bouncing so those 12,000 people who lost their jobs might get them back...Remember, it's for the good of the colombians, not us gringos...

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