Monday, December 20, 2004

Now Colombia's Banco de la Rep´┐Żblica joins the crowd of official dollar-buyers.
The central bank also today bought $180 million worth of dollars through contracts that can be exercised within a month. . . .

The government and central bank have spent about $3.3 billion this year in an unsuccessful attempt to weaken the peso. Carrasqilla said the bank would keep buying dollars next year, echoing comments made in a Dec. 13 interview with the central bank's technical director, Jose Dario Uribe, who will take over as the bank's managing director in January.
Colombia isn't relying strictly on selling pesos and buying dollars, however. It is also lowering interest rates and using capital controls to try to scare folks off the peso.

The central banks of three of the four largest economies in South America (Brazil, Argentina and Colombia) are scrambling to force their currencies down against the dollar. They're only bit players compared to the East Asians and the Europeans, but with the US possibly looking for $800bn next year plus another $100bn (the first of ten such installments over the next ten years) on top of that to build a bridge to Bush's privatization of Social Security, every little bit helps.


Post a Comment

<< Home