Like most emerging currencies, Colombia's peso has weakened this
year as the dollar has strengthened amid steady rate rises by
the U.S. Federal Reserve. But the peso's falls have been far
less severe than peers in Argentina, Turkey, South Africa or
While there are fears Colombia's big current account deficit
makes it vulnerable to contagion, Echavarria ruled out
"Absolutely not, even if we have a devaluation of 10 or 15
percent," he said in an interview. "10 percent (devaluation) is
no problem at all."
The governor said he did not at this stage envisage raising
interest rates either, even next year, but added that "a lot
depends on the exchange rate".
Echavarria also saw no reason for the Fed to be swayed in its
policy decisions by the woes of emerging markets.
"They have to do their job, every country has to do their job. I
don't think (Fed Chair Jerome) Powell will increase or decrease
interest rates because of emerging markets. The best thing for
emerging markets is that the Fed does what they need to do for
inflation and growth."
(Reporting by Karin Strohecker; Writing by Sujata Rao; Editing
by Andrew Heavens)
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