WASHINGTON, Oct 9 (Reuters) - Colombian Finance Minister Mauricio Cardenas said on Wednesday he would be comfortable with an exchange rate of between 1,900 and 1,950 Colombian pesos per U.S. dollar, a level weaker than the currency’s trading average in recent months and years.
That upper limit of the minister’s suggested range is 6 percent weaker than the average for the peso for the last two years, 3.2 percent weaker than the average for the last six months and 3 percent weaker than today’s close, according to Thomson Reuters data.
“We have said that an exchange rate of between 1,900 and 1,950 pesos per dollar is a rate that generates calm in terms of an equilibrium,” Cardenas told reporters at a news conference following a meeting of finance ministers of the Americas.
“We believe that the conditions are there, both in the international environment as well as in the Colombian monetary and exchange rate policy so that the currency is within that range,” he said.
The Colombian peso has weakened about 6.6 percent this year against 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 recent months on expectation the U.S. Federal Reserve will reign in a five-year bond-buying program that has pumped hundreds of billions of dollars into the world economy.
With developed-world interest rates near zero, much of that cash went to higher-yielding emerging markets. That flood of capital helped strengthen emerging market currencies against the dollar. The expected reduction of that program, known as quantitative easing, threatens to reverse that trend.