Between May 1 and 15, the Colombian peso recorded a 3.84% depreciation, the largest among 22 emerging currencies. The dollar reached 3,796.78 pesos, driven by purchases from the Finance Ministry and electoral uncertainty.
The Colombian peso weakened more than any other emerging currency during the first half of May. Analysts attribute the move to dollar purchases by the Finance Ministry and the proximity of the May 31 presidential elections.
Omar Suárez, equity manager at Aval Casa de Bolsa, noted that “the peso was affected by the swaps carried out by MinHacienda, which made significant dollar purchases; electoral uncertainty is also affecting it”. On May 13 the government bought 500 million dollars, pushing up the price of the U.S. currency.
Globally the dollar rose for a fifth straight day and U.S. Treasury yields reached 4.5 %. Independent analyst Andrés Langebaek added that the central bank’s decision to hold interest rates reduces the appeal of investing in pesos.