BOGOTA, May 20 (Reuters) - Colombia’s President Juan Manuel Santos said on Tuesday it would be reasonable for the currency to weaken to between 2,000 and 2,200 pesos per dollar as a result of government intervention and dollar-buying by the central bank.
The peso has recovered over the last two months from an accumulated 9 percent devaluation in 2013, thanks to an influx of foreign funds after J.P. Morgan changed the weighting of the country’s debt in its indexes.
The peso was trading at 1,919.5 to the dollar on Tuesday.
“I would hope that we could return to between 2,000 and 2,200, which for me is a reasonable, convenient exchange rate where flower growers, coffee farmers and other exporters can feel comfortable,” said Santos during an Internet forum.
A strong peso affects industrialists and exporters, who receive dollars from clients but pay production costs in local currency.
“I hope that the policies we’re putting in place will once again have the same positive effect that they had a few months ago,” said Santos, who is running for re-election in a tight race on Sunday.
Last week the government re-started its foreign exchange intervention, though analysts said participation had so far been minimal, with Colombia purchasing around $100 million in total.
The Central Bank bought $878 million between January and April, an intervention it plans to extend until June. (Reporting by Nelson Bocanegra and Monica Garcia, writing by Julia Symmes Cobb; Editing by Bernard Orr)