Colombia Peso Bond Yields Fall to Record Before Inflation Report

Yields on Colombia’s peso bonds fell to a record for a fourth day as speculation inflation slowed in September boosted demand for the fixed-rate securities.

The yield on the government’s 10 percent peso-denominated bonds due in July 2024 fell two basis points, or 0.02 percentage point, to 6.26 percent, according to the central bank, the lowest level since the debt was first sold in 2009. The price rose 0.182 centavo to 130.498 centavos per peso.

“Inflation will be the driver through the remainder of the week,” said Camilo Perez, the head analyst at Banco de Bogota, the nation’s second-biggest bank. “If it comes in too high, people will read it as an argument for the central bank to remain on hold. If it comes low, they’ll see it as an indication there will be another cut.”

Annual inflation slowed to 2.95 percent in September, according to the median estimate of 27 economists surveyed by Bloomberg before tomorrow’s report. The central bank has an inflation target of 2 percent to 4 percent.

Banco de la Republica kept the overnight lending rate at 4.75 percent on Sept. 28 after a reduction of a quarter- percentage point in August.

The peso appreciated 0.4 percent to 1,795.05 per U.S. dollar, extending its gain this year to 8 percent.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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