Colombia Bond Yields Rise Before GDP Report; Currency Advances

Colombia’s peso bond yields rose before a government report that is forecast to show the economy grew at the slowest pace in two years in the third quarter, damping demand for the debt.

The yield on the government’s 10 percent peso-denominated securities due in July 2024 rose two basis points, or 0.02 percentage point, to 5.9 percent at 9:57 a.m. in Bogota, according to the stock exchange. The peso rose 0.1 percent to 1,789.06 per dollar, bringing its gain this year to 8.4 percent.

“People will be watching for the report to get a better sense if the central bank will need to cut rates further,” Eduardo Bolanos, an analyst at Asesores en Valores brokerage in Bogota, said in a phone interview.

Policy makers last month unexpectedly lowered the overnight lending rate by a quarter-percentage point to 4.5 percent to boost a slowing economy. Banco de la Republica will lower the benchmark to 4.25 percent on Dec. 21, according to three of 31 economists surveyed by Bloomberg. The rest project the target rate will hold steady.

The economy expanded 3.9 percent in the third quarter from a year ago, according to the median estimate of 28 economists surveyed by Bloomberg. That would be the lowest since the third quarter of 2010. The national statistics agency is slated to publish the gross domestic product report at 11 a.m. in Bogota.

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.