The Colombian peso strengthened to 3,570 per USD in June, reaching its highest level in more than five years, after right-wing populist presidential candidate de la Espriella unexpectedly won the first round of elections. Considered a political outsider, de la Espriella will face leftist candidate Cepeda, who is backed by outgoing President Petro, in the run-off.
The peso’s rally was in line with gains across other Colombian asset classes. De la Espriella has pledged to reduce Colombia’s widening budget deficit amid increasingly strained public finances; last year’s fiscal shortfall stood at 6.4% of GDP, a key factor behind the central bank’s decision to maintain restrictive interest rates. At the same time, he has vowed to support coal mining and oil exploration in Colombia, sectors that have encountered resistance from the current administration.
