Colombia Bond Yields Drop on Slower Inflation View; Peso Gains

Colombian peso bond yields fell for a third day as speculation mounted that inflation slowed, boosting demand for the fixed-rate securities.

Inflation was 0.15 percent in November, slowing from 0.16 percent in the prior month, according to the median forecast of 29 economists surveyed by Bloomberg. The national statistics agency is due to release the report today after markets close. The central bank has an inflation target of 3 percent, plus or minus one percentage point.

“Right now the market will be very focused on inflation,” said Daniel Lozano, the head analyst at Serfinco SA brokerage in Bogota. “Today’s number will signal how prices are set to end the year, and if it’s lower than expected we could see inflation fall below 3 percent.”

The yield on the government’s 10 percent bonds due in July 2024 dropped two basis points, or 0.02 percentage point, to a record low 5.94 percent, according to the central bank. The peso appreciated 0.1 percent to 1,811.73 per U.S. dollar at the close in Bogota.

Colombian inflation is under control, Finance Minister Mauricio Cardenas said in a speech today.

To contact the reporter on this story: Christine Jenkins in Bogota at cjenkins28@bloomberg.net

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

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