Colombia to Abandon Investment Limits as Peso Gains [View All]

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March 2 (Bloomberg) -- Colombia will abandon a two-month-old policy requiring international investors to keep their money in the country for at least a year after the measure failed to curb a rally in the currency, Finance Minister Alberto Carrasquilla said.

``It has proven itself to be extremely limited, if not useless, by nature.'' said Carrasquilla, 45, in an interview Feb. 28 in Bogota. ``I am very concerned that it's in place. I don't like it.'' The restrictions will end within six months, he said.

The peso gained 1.9 percent against the dollar since President Alvaro Uribe ordered the restrictions Dec. 15, extending a 14 percent rise in the past year. The stronger currency ``has a very important downside'' by threatening to crimp exports, and the government will keep up efforts to try to stem its rise by buying dollars, said Carrasquilla.

Without the investment limits, investors such as Brian Wolahan at Acadian Asset Management in Boston said they would reconsider buying Colombian stocks and bonds. The benchmark stock index has almost doubled in the past 12 months and prices on the benchmark bond due 2012 have climbed on increased confidence in the economy after Uribe, 52, stepped up his fight against rebels and improved security.


Bloomberg