Colombia peso, market rally as business-friendly candidate advances

BOGOTA, Could 31 (Reuters) – Colombia’s peso and inventory exchange closed greater on Tuesday, in the 1st session given that the contest to elect the country’s up coming president narrowed to two candidates, which includes business-pleasant design magnate Rodolfo Hernandez.

Leftist Gustavo Petro, who has promised profound social and financial change, gained 40.3% of votes in Sunday’s first round, though Hernandez, who has drawn help for his guarantees to deal with corruption, unexpectedly tallied 28.2%.

Hernandez, already backed by previous middle-proper prospect Federico Gutierrez and most likely lots of of his supporters, may possibly be tricky for Petro to beat. read through more

The peso shut up 4.16% to 3,770 pesos for every greenback, its sharpest daily enhance due to the fact December 2010 and strongest price towards the dollar since April 20. The COLCAP (.COLCAP) stock trade was up 4.63% to 1,603.23 points at the finish of investing.

Petro, a previous mayor of Bogota, is earning his 3rd bid for the presidency promising cost-free general public university, a ban on new oil and gas initiatives and a pension reform to present payments to the poorest.

Hernandez, a farmer’s son who made his fortune developing small-money housing, says he will minimize the size of authorities and use the personal savings to spend off pupil credit card debt, reduce the value additional tax approximately in 50 percent to 10% and merge a team of subsidies into a single basic cash flow.

Hernandez, who is funding his possess campaign and has eschewed classic advertising in favor of eccentric TikTok video clips, is broadly noticed as friendlier to the market place – which was shut on Monday.

“Hernandez is witnessed as much less negative…he represents some continuity in conditions of financial independence and no cost business,” claimed Andres Abadia, head economist for Latin America for Pantheon Macroeconomics.

“The markets have started an crucial rally simply because the risk of a disruptive modify is now not the foundation scenario,” mentioned Sergio Olarte, head economist for Colombia at Scotiabank.

Despite the 77-yr-old’s business credentials, Cash Economics explained in a notice on Monday that Hernandez may perhaps present a larger sized threat than Petro.

“Neither Hernandez nor Petro are very likely to tighten fiscal plan to cut down community financial debt pitfalls, when both equally advocate increased trade obstacles which bodes inadequately for Colombia’s expansion potential customers,” the take note mentioned.

“(Hernandez’s) program to slash taxes would cause the general public credit card debt-to-GDP ratio to surge (while we consider it would go on to rise under Petro also),” it additional. “More than the medium phrase, Hernandez’s prepare to elevate trade limitations would weigh on productiveness and economic development (Petro seems to advocate a lot more average trade safety).”

The two men, who each have pledged to entirely put into action a 2016 peace offer with FARC rebels and search for talks with remaining guerrilla group the ELN, will encounter off once more on June 19. study a lot more

Hernandez has pushed back again on accusations he will now depict the country’s right-wing events, saying he will acknowledge everyone who wishes to vote for him but will not negotiate policies in exchange for alliances.

Reporting by Nelson Bocanegra
Composing by Julia Symmes Cobb
Editing by Alistair Bell and David Gregorio

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