Colombia Yields Rise to Three-Week High on Rate View; Peso Falls

Colombia’s peso bond yields rose to a three-week high as investors pared bets on further interest rate cuts this year.

The yield on the 10 percent peso-denominated bonds due in July 2024 increased one basis point, or 0.01 percentage point, to 6.17 percent, according to the central bank. That is the highest level on a closing basis since Oct. 4. The bond’s price fell 0.115 centavo to 131.218 centavos per peso.

The central bank held the target lending rate at 4.75 percent on Oct. 26, citing eased risk of a global economic slump and the expanding Colombian economy amid growing domestic demand. While 28 analysts surveyed by Bloomberg expected the rate to remain unchanged, seven projected a reduction of a quarter-percentage point. Policy makers have cut the target rate twice since June from 5.25 percent.

“The tone of the central bank’s statement is optimistic, lowering the chances of another cut this year,” said William Florez, an analyst at Helm Bank SA (PFBHELMB)’s brokerage in Bogota.

The peso fell for a ninth day, slipping 0.1 percent to 1,832.15 per U.S. dollar. The currency fell 1.7 percent in October, paring its rally this year to 5.8 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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