Colombia’s peso advanced to the highest level in almost a month as China cut interest rates for the first time since 2008, buoying prospects for global growth and higher-yielding assets.
The peso appreciated 0.7 percent to 1,769.82 per dollar, the strongest closing level since May 11. It has rallied 9.5 percent this year, the best performance among all currencies tracked by Bloomberg.
“China is what’s driving the market,” said William Florez, an analyst at Helm Bank SA’s brokerage unit in Bogota. “The news from international markets helps calm investors, and that benefits capital inflows to Colombia.”
The yield on Colombia’s 10 percent peso-denominated debt due in July 2024 dropped four basis points, or 0.04 percentage point, to 7.07 percent, according to the central bank. The price rose 0.402 centavo to 123.324 centavos per peso.
China’s benchmark one-year lending rate will drop to 6.31 percent from 6.56 percent effective tomorrow, the People’s Bank of China said on its website today. Policy makers also loosened controls on banks’ lending and deposit rates, stepping up efforts to combat a deepening slowdown.