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Local Assets Plunge After Carrasquilla's Departure

COLOMBIA
  • The peso weakened substantially as USDCOP traded to fresh highs of 3819. The local currency was the worst performer among more than 100 currencies tracked by Bloomberg, as Carrasquilla's exit triggered a selloff in Colombian assets.
  • The Sep/Oct 2020 highs around 3900 are the focal resistance point.
  • The nation's dollar bonds also fell, as investors see an increased risk of its credit rating being cut to junk in the near future.
    • The withdrawal of Colombia's tax bill is negative for the nation's credit outlook as it raises doubts about fiscal consolidation, Moody's Investors Service analyst Renzo Merino says in an emailed statement.
  • 5-year IBR swap rates surged almost 20 basis points on Monday.

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