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Colombia Peso Bond Yields Rise Most in Week on Outlook for Rates

Colombia’s peso bond yields rose the most in a week as investors pared bets on further interest-rate cuts after inflation quickened in September more than forecast.

The yield on the 9.25 percent peso-denominated debt due in May 2014 climbed two basis points, or 0.02 percentage point, to 4.87 percent, according to the central bank, the biggest increase since Oct. 1. The price fell 0.06 centavo to 106.529 centavos per peso.

Colombian consumer prices rose 0.29 percent in September after an increase of 0.04 percent in the prior month, the national statistics agency said. The reading was higher than the 0.16 percent median forecast in a Bloomberg survey of 32 economists. Annual inflation was 3.08 percent in September.

“While inflation remains under control, the data indicate there is no more room for another rate cut,” said Jorge Cardozo, an analyst at Corredores Asociados SA in Bogota.

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

The peso declined 0.1 percent to 1,797 per dollar, according to the stock exchange’s electronic currency transactions system, known as SET-FX. Because of a U.S. holiday today, Colombia’s currency trades in the next-day market, in which payment and delivery are made the following trading day.

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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