(Bloomberg) — The Colombian peso tumbled on Tuesday morning on unconfirmed local media reports that Finance Minister Diego Guevara would step down.
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Ministry officials said in a statement that they couldn’t confirm his exit. Guevara himself didn’t immediately respond to a written request for comment.
Colombia’s currency fell as much as 1.4% against the greenback. The nation’s dollar bonds fell across the curve and are the worst performers in emerging markets, with notes maturing in 2049 losing 0.8 cents on the dollar. Reports of Guevara’s exit sparked concerns among investors as it introduces a new level of uncertainty and instability in public finances, said Andres Pardo, head of Latin America strategy at XP Investments.
“Guevara was being sensible, sending a message of commitment with debt payments and trying to adjust public finances, despite difficulties,” Pardo said.
The news is likely to continue weighting on the Colombian peso as the decision points to a more polarized government ahead of the presidential campaign, given the failure of Petro’s reforms, said Jose Prieto Jaramillo, business head at BTG Pactual.
Guevara, who took office in December 2024, has struggled to rein in fiscal deficits that have widened dramatically since the pandemic due to weak revenues and slow economic growth.
Colombia posted a fiscal deficit of 6.8% of gross domestic product last year, the widest since the pandemic. Fitch Ratings lowered Colombia’s credit outlook to negative from stable earlier this month citing fiscal concerns, while it maintained the nation’s credit rating at BB+.
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