Colombia Peso Bond Yields Fall on Inflation View; Currency Drops

Yields on Colombian peso bonds fell as speculation that inflation slowed last month boosted demand for the fixed-rate securities.

The yield on the government’s 11 percent peso-denominated note due in 2020 fell two basis points, or 0.02 percentage point, to 4.95 percent at 9:12 a.m. in Bogota, according to the central bank.

Consumer prices rose 2.24 percent in January, compared with 2.44 percent in the prior month, according to the median estimate of 22 analysts surveyed by Bloomberg. The national statistics agency is slated to publish the monthly report tomorrow. Slower inflation boosts returns on fixed-rate bonds.

“The market is expecting inflation to be pretty low,” Taimyra Batz, an analyst at Ultrabursatiles SA brokerage in Bogota, said in a phone interview.

The peso declined 0.5 percent to 1,784.30 per U.S. dollar, its biggest drop since Jan. 22.

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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