Colombia's peso reached its strongest level in more than a month on Monday. A central bank official indicated interest rates may need to remain elevated for an extended period, while investors expect further Fed hikes.
Colombia's peso strengthened 0.54% to 3150.25 per dollar on Monday, its highest point since September 17. The move followed a signal from a central bank official that interest rates may need to remain elevated for an extended period.
Laura Moisa, a member of the seven-person board at Colombia's central bank, said on Friday that inflation stems primarily from supply-side shocks. She added that rates will need to stay high for a longer duration.
The U.S. Federal Reserve raised interest rates last month for the first time since 2023. Investors anticipate at least two additional Fed rate increases by March 2027, and Fed hikes typically strengthen the dollar against other currencies.
Still, the Colombian peso has emerged as one of the region's top-performing currencies this month, drawing investors who want better yields than the dollar offers. Across the region, MSCI's index tracking Latin American currencies rose 0.45% on Monday, Mexico's peso gained 0.26% and Chile's peso advanced 0.38%.
Source: Investing.com
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