Colombia minister comfortable with slightly weaker peso

Reuters

WASHINGTON, Oct 9 (Reuters) - Colombian Finance MinisterMauricio Cardenas said on Wednesday he would be comfortable withan exchange rate of between 1,900 and 1,950 Colombian pesos perU.S. dollar, a level weaker than the currency's trading averagein recent months and years.

That upper limit of the minister's suggested range is 6percent weaker than the average for the peso for thelast two years, 3.2 percent weaker than the average for the lastsix months and 3 percent weaker than today's close, according toThomson Reuters data.

"We have said that an exchange rate of between 1,900 and1,950 pesos per dollar is a rate that generates calm in terms ofan equilibrium," Cardenas told reporters at a news conferencefollowing a meeting of finance ministers of the Americas.

"We believe that the conditions are there, both in theinternational environment as well as in the Colombian monetaryand exchange rate policy so that the currency is within thatrange," he said.

The Colombian peso has weakened about 6.6 percent this yearagainst the dollar. The peso was little changed on Wednesday,weakening 0.1 percent to 1,891.50 to the dollar.

Latin American currencies have been weakening in recentmonths on expectation the U.S. Federal Reserve will reign in afive-year bond-buying program that has pumped hundreds ofbillions of dollars into the world economy.

With developed-world interest rates near zero, much of thatcash went to higher-yielding emerging markets. That flood ofcapital helped strengthen emerging market currencies against thedollar. The expected reduction of that program, known asquantitative easing, threatens to reverse that trend.

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