Colombia's Finance Minister, Mauricio Cerdenas, may announce that the signing of the pension fund decree could be delayed, according to high-level government and industry sources. This could be due to the slowing down of the steady flow of dollars which has lessened the need for such a decree.
The pension fund decree had two goals. First, it aimed to boost dollar-denominated investments and diversify risk of pension funds' portfolios. Second, the decree also aimed to encourage pension funds to make more investments overseas. In this way, the Colombian government hoped the pressure on the peso would ease.
When the pension fund decree was first launched last April, Deputy Finance Minister Andres Restrepo said that it would be ready by June. However, holding back on the decree now may still be to the country's advantage. Delaying the signing and enactment of the pension fund decree could encourage purchases of peso-denominated bonds. These TES bonds historically made up the bulk of portfolio managers' assets.
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