Columbia Peso being cooled off
Bank of America (NYSE:BAC) says the strong run of the Columbian peso is over, as central bank head Jose Dario Uribe begins to battle its strength in order to increase exports and improve the nation's economy.
The method to be used will be an increased acquisition of U.S. dollars.
Estimates are the peso will plunge by about 9 percent against the dollar by the end of 2010; by far the largest fall of any major currency the world, according to a number of analysts.
Of all emerging market countries, the Columbian peso has risen the most, gaining 6.4 percent against the dollar in the first quarter alone.
With about $8 billion being estimated to be added to foreign capital entering the country in 2010, the approximate $20 million a day spent to acquire dollars isn't considered a large enough move by many of those in business.
So far since the new policy has been instituted, the peso has dropped 1 percent in value.
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