The Colombian peso has recorded an appreciation of more than 20 percent against the dollar over the past 12 months, one of the highest in the decade.
The US dollar broke below 3,200 pesos in recent sessions, reaching levels not seen since July 2019. Analysts attribute the local currency's strength to carry trade supported by the 12 percent interest rate set by Banco de la República and rising oil prices near 90 dollars per barrel.
Mauricio Acevedo, strategist at Corficolombiana, noted that the trend could continue in the medium term due to the interest rate differential. Valeria Álvarez of Itaú Colombia emphasized that the peso leads regional performance with double-digit appreciation.
Bloomberg data show the peso as the most appreciated emerging market currency in the past month at 7.13 percent and over the past five years at 20.37 percent. The movement also stems from the global weakening of the dollar and higher remittances.