Colombia Seeks to Avoid Capital Controls, Echeverry Says

Colombia’s Finance Minister Juan Carlos Echeverry said the government will seek to avoid using capital controls as a measure to ease gains in the peso.

Echeverry, who spoke during a breakfast in Bogota, said if the government maintains a prudent fiscal policy it can avoid using capital controls.

Gains in the peso over recent weeks were caused by dollar inflows into the country by companies making their tax payments, Echeverry said.

“As much as we can maintain an austere policy, we will avoid imposing capital controls,” Echeverry said.

The peso’s 6 percent rally in the last month the fourth- best performance against the dollar among 25 emerging market currencies has sparked speculation the government will announce further measures this week to curb the advance.

The central bank may announce at its monetary policy meeting tomorrow that it will boost the amount or extend the duration of its daily dollar purchases, according to analysts like Daniel Lozano at Bogota-based brokerage Serfinco SA.

The peso strengthened 0.2 percent to 1,772.00 per U.S. dollar at 10:49 a.m. New York time its strongest level since August 2008 from 1775.00 yesterday.