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Colombia’s peso rose the most in two months on speculation the expanding economy will keep attracting investment from abroad.

The peso appreciated 0.7 percent to 1,775.66 per U.S. dollar from 1,788.75 on March 30. The gain was the biggest since Jan. 18. It has jumped 9.2 percent this year, the second-best performance after the Mexican peso among the six most-traded Latin America currencies.

The peso touched a six-week low on March 29, a day after Finance Minister Juan Carlos Echeverry said the central bank should consider boosting dollar purchases and study possible “surprise” moves to halt the currency’s advance. In a bid to ease gains in the peso, the central bank has said it will purchase a minimum of $20 million daily in the spot market until at least Aug. 4.

“The peso is going back to its strengthening trend as good economic results and high interest rates are attracting both foreign direct investment and portfolio investment,” said Julian Marquez, an analyst in Bogota at Interbolsa SA, Colombia’s largest brokerage. “The peso will have its days of weakening as we get verbal intervention, but the general trend is for it to trade between 1,750 and 1,770.”

Colombia’s economy grew 5.9 percent in 2011, the biggest annual jump since gross domestic product expanded 6.9 percent in 2007, according to a March 22 government report.

The yield on the country’s 10 percent peso-denominated debt due in July 2024 fell two basis points, or 0.02 percentage point, to 7.23 percent, according to the central bank. The price rose 0.174 centavo to 122.021 centavos per peso.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

http://www.bloomberg.com/news/2012-04-02/colombian-peso-gains-most-in-two-months-on-investment-outlook.html