Exclusive: Colombia may pre-finance 2015 borrowing needs - finance minister

Mon Sep 15, 2014 4:59pm EDT
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By Daniel Bases

NEW YORK (Reuters) - Colombian Finance Minister Mauricio Cardenas said on Monday the government could start early to pre-finance some of its estimated $3 billion in 2015 borrowing needs by tapping international capital markets before year-end.

"We are now thinking for next year. We may pre-finance some of the needs for 2015, but that depends on the markets, that depends on the assessment whether it is better to come to the markets with a bond issue this year or next year," Cardenas said in an interview with Reuters.

"And it is also a question that has a lot to do with what we expect the (U.S. Federal Reserve) to do with interest rates here in the United States," Cardenas said, referring to the international component of the nation's debt stock.

Cardenas, in New York for a meeting with investors, said the nation's currency, the peso , has weakened against the U.S. dollar to levels Colombia considers consistent with "macroeconomic equilibrium."

The peso currently trades around 1,987 pesos to the U.S. dollar, having weakened from 1,837.5 pesos in early July as a combination of central bank dollar buying to boost the coffers of exporters, weakening oil output and lower crude prices softened demand for the currency.

"It is a rate that gives us a lot of comfort. If the peso weakens a bit more, we would not mind. I think that would be healthy also for the economy," Cardenas said.

Last week, President Juan Manuel Santos said he expected the peso to settle in a range of 2,000 to 2,100 per U.S. dollar.

Cardenas, who sits on the central bank's monetary policy board, said he believes the current benchmark interest rate of 4.5 percent could be considered at a "neutral" level. This meets the nation's mid-point inflation target of 3 percent and at the same time help the economy achieve its forecast growth rate of 4.7 percent for the year.   Continued...

Colombia's Finance Minister Mauricio Cardenas gestures during an interview with Reuters in Bogota March 10, 2014. REUTERS/John Vizcaino