Diego Guevara would be replaced by the director of the state-owned Grupo Bicentenario, Germán Ávila Plazas.
Colombian Finance Minister Diego Guevara will step down amid disagreements with President Gustavo Petro, media outlets and a presidential source told Reuters on Tuesday, sending local markets tumbling.
The presidential source, who requested anonymity, said there were disagreements between Petro and Guevara over budget cuts, leading the minister to resign Monday night.
Another source in Petro's office said he had no confirmation of the change and that Guevara was still performing his duties.
The Ministry of Finance said in a brief statement that "to date, there is no official information regarding the reported situation. The statements and rumors circulating in various media outlets have not been confirmed or endorsed by our agency."
The Caracol radio network reported that Guevara would be replaced by the director of the state-owned Grupo Bicentenario, Germán Ávila Plazas.
For analysts, the change of minister accentuates the uncertainty about the future of public finances, at a time when fiscal sustainability is facing its most challenging point of the current century.
"The constant changes in the cabinet and the profile of the incoming minister give rise to an air of political and economic instability," Banco de Bogotá said in a statement. "What's more, the news even casts doubt on the expected interest rate cut by the Board of the Central Bank of the Republic at the end of March."
The Colombian peso closed down 1.08% at 4,118 per dollar, while the secondary market for public debt reported depreciations across the curve of the main TES bonds, and the stock market index, the MSCI COLCAP, fell 0.76% to 1,622.17 points.
Guevara stated in early March that the government is considering the possibility of postponing spending again in the 2025 budget amid the fiscal difficulties of Latin America's fourth-largest economy.
The official, who has been in his position for just over three months and previously served as Deputy Minister of Finance, enjoys a good reputation in the markets for his technical and responsible approach to public finances.
Petro recently replaced 12 of his 19 ministers amid a reshuffle stemming from an internal crisis stemming from the appointment of Armando Benedetti as head of the cabinet and later Minister of the Interior, as well as Laura Sarabia as Foreign Minister.
Officials close to the president asserted that Benedetti and Sarabia are not part of his progressive political project that brought him to the presidency.
