Forex trading store

By Javier Mozzo

BOGOTA, Aug 20 (Reuters) – Colombia’s central bank put ~ Friday kept its key interest rate unchanged at 3 percent at the same time that widely expected, but the bank’s board did not adopt ~ one measures to curb the sharp rise of the local peso.

The limited currency has appreciated more than 11 percent so far this year, prompting demands from topical businesses that the government intervene and fueling market speculation over potential capital controls.

Exporters of Colombian goods such as textiles, flowers and manufactured effects receive earnings in dollars but must pay for services and products at home in some increasingly strong peso.

Colombia’s economy is enjoying a robust recuperation after growing just 0.8 percent last year, but inflation is staying within the bank’s 2 to 4 percent target range for this year.

It was the fourth successive month the bank has kept its key interest rate stable.

‘The knowledge of facts received shows the Colombian economy is growing at a faster hurry than expected, without generating inflationary pressures,’ the bank said in a statement.

But the bank board surprised the market by not announcing ~ one measures such as dollar purchases or controls on short-term principal to control the peso as many investors had expected.

The bank related it was still studying currency measures, which some investors took to despicable an intervention by purchasing dollars at a later time.

‘The place of traffic without a doubt expected something, at least the announcement they would property dollars. Independent of what is happening in external markets, we are going to suffer a rise in the peso at the start of next week,’ related Santiago Melo, an analyst with the financial firm Alianza Valores.

The peso closed Friday trading down just 0.17 percent at 1,821 pesos against the dollar ahead of the announcement as traders were cautious before the board’s assembly. But the peso in the ‘next day’ market rose 0.99 percent to 1,803 from the stop up of the normal trading.

Expectations for currency measures rose over the remain few weeks, especially after President Juan Manuel Santos met with the bank’s table to discuss the peso and as exporters pressured for measures to co-operate with them.

The Santos government has said it is studying ways to improve productivity by investments in infrastructure and by reducing tariffs to help Colombian exporters stay competing.

(Writing by Patrick Markey; editing by Chizu Nomiyama and Todd Eastham) Keywords: COLOMBIA RATES/

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