Colombia central bank ponders increased dollar purchase

The central bank of Colombia is probing the possibility of doubling the amount of dollars it acquires from the U.S. as a strategy of limiting the second-biggest rally for the peso, a bank administrator told Bloomberg.

Policy makers with the central bank might also extend their current program of making daily purchases of USD, the world’s reserve currency, beyond when it is scheduled to end in November, co-director Cesar Vallejo told the news source during a Monday interview.

"If we change, it would be from $20 million to $40 million, for an announced time frame," the co-director told the news source. "The other alternative would be, instead of stopping in November, to keep buying until December 31, or until February."

Thus far this year, the Colombian peso has grown 7.7 percent against the USD. This puts the Colombian peso’s appreciation second only to its Chilean counterpart out of the 170 currencies monitored by the news service. Colombia's oil and mining projects are drawing significant international attention and investment.

Reuters reports that this week the nation’s government will purchase at least $300 million-worth on the foreign exchange market to cap advances of the peso against the world's reserve currency.