Colombia’s peso dropped to its lowest level in two months after Finance Minister Juan Carlos Echeverry said the Treasury will buy $300 million this week to curb the currency’s rally.

The peso slid 0.8 percent to 1,817.80 per U.S. dollar after earlier touching 1,821.76, the weakest level since June 4. It has rallied 6.6 percent this year, the best performance in the world after the Chilean peso and the Hungarian forint among currencies tracked by Bloomberg.

Echeverry’s announcement after the close of trading yesterday follows earlier comments in which he urged an increase in minimum daily dollar purchases from $20 million, saying a strengthening peso threatens to undermine local industry and farmers. Central bank co-director Cesar Vallejo said in an interview earlier this week that policy makers are considering doubling daily purchases to $40 million.

“After so much intervention talk, the government is finally moving from rhetoric to action,” said Juan Nicolas Garcia, a currency trader at HSBC Colombia.

Speaking to reporters today, Echeverry said the Treasury will continue to buy dollars as long as it has “ammunition.”

Citigroup Inc. recommended in a research note that clients take bets that the peso will fall against the dollar. The peso may weaken to as low as 1,850 per dollar, Citigroup said.

Standard & Poor’s said in a statement today that it may raise Colombia’s foreign debt rating as economic growth in the Andean country increases revenue and leads to lower debt levels. S&P rates Colombia BBB-, the lowest level of investment grade. The outlook was moved to positive from stable, it said.

The announcement came after the close of Colombia’s bond and currency market.

Peso bonds in the long end of the curve may gain tomorrow following S&P’s announcement, Alianza Valores brokerage wrote in a note to clients.

The yield on Colombia’s 10 percent peso-denominated debt due in July 2024 closed little changed at 6.64 percent. It fell to 6.60 percent on Aug. 2, the lowest on a closing basis since the securities were first issued in 2009.

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