Colombia’s peso bond yields rose to a five-week high on speculation the central bank’s easing cycle will come to an end after this week’s meeting.
Yields on Colombia’s benchmark peso bonds due 2024 rose three basis points, or 0.03 percentage point, to 5.04 percent at 9:09 a.m. in Bogota, the highest level on a closing basis since Feb. 13, according to the central bank.
The yield on the benchmark securities has fallen 62 basis points this year as the central bank cut the overnight lending rate by 150 basis-point reduction since July. Banco de la Republica will lower borrowing costs by 25 basis points to 3.5 percent on March 22, according to the majority of analysts surveyed by Bloomberg.
“There’s not much more to go in terms of rate cuts which have helped drive the rally,” said Daniel Lozano, head analyst at Serfinco brokerage in Bogota.
After this week’s meeting, policy makers will leave the rate unchanged in April and raise it to 3.75 percent by year- end, according to a survey of analysts published today by Citigroup Inc.
The peso was little changed at 1,811.94 per U.S. dollar.
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