Favorite to the presidency of Colombia provokes massive sale of the peso

(Bloomberg) — The Colombian peso slumped after the leading presidential candidate called on regional allies to move away from fossil fuels and urged the central bank to refrain from further raising interest rates. interest.

Most Read from Bloomberg

The peso weakened 0.9% on Friday to 4,004.03 per dollar, the biggest drop in about a month, according to data compiled by Bloomberg. It was the second-highest devaluation among emerging market currencies on the day and the worst in Latin America.

Gustavo Petro, a former guerrilla fighter and current pro-clean energy senator, said in an interview that he wants to form a global bloc to move away from oil and coal, which combined make up almost half of the country’s exports. Petro also questioned the monetary tightening, arguing that most inflationary pressures come from foreign markets.

“No exploration means a weaker peso,” said Carolina Monzón, an analyst at Banco Itaú Colombia. «Interest rate hikes are necessary to contain inflation.»

Petro said he cannot be blamed for market movements that occur when he is not in office. The senator, who lost the 2018 elections against the current president, Iván Duque, leads the polls ahead of the presidential elections in May.

original note:

Colombia’s Presidential Front-Runner Sparks Selloff in Peso

Most Read from Bloomberg Businessweek

©2022 Bloomberg LP