Colombia's finance minister steps down after budget clash with president

BOGOTA (Reuters) -Colombian Finance Minister Diego Guevara announced his resignation on Tuesday, amid clashes over budget cuts and just hours after lawmakers rejected a labor reform championed by leftist President Gustavo Petro.

Analysts say Guevara's exit, after just over three months in the role, underscores uncertainty about the future of Colombia's deeply-troubled public finances.

Guevara, who had a previous stint as vice finance minister, revealed his decision in a post on X, saying he had a "calm and friendly" conversation with Petro, but gave no reason why.

A source from the presidential palace said Petro and Guevara disagreed over budget cuts and Guevara resigned on Monday night.

Petro, the South American nation's first leftist leader, has recently replaced 12 of his 19 ministers.

Radio station Caracol said Guevara is to be replaced by German Avila, the head of Grupo Bicentenario, a holding company created six years ago of firms in which the government holds a stake.

Avila may lack the experience to successfully manage public finances, however, Banco de Bogota wrote in a note.

"The constant changes in the cabinet and the profile of the incoming minister will increase political and economic instability," it said.

The finance ministry's latest leadership shakeup would stoke doubts over an expected cut in the central bank's benchmark interest rate, it added.

The Colombian peso closed down slightly more than 1% on Tuesday before the news, weakening to 4,118 against the U.S. dollar.

This month, Guevara said the government was considering a fresh delay to budget spending this year, as it tackles fiscal difficulties that have already forced spending reductions.

(Reporting by Carlos Vargas and Luis Jaime Acosta; Writing by Julia Symmes Cobb, Gabriel Araujo and Natalia Siniawski; Editing by Nia Williams and Clarence Fernandez)