Colombian Bond Yields Rise Ahead of GDP Report; Peso Declines

Colombia’s peso bond yields rose to a six-week high on speculation a report today may show the economy grew faster than expected in the fourth quarter, leading the central bank to delay cutting interest rates.

Yields on peso bonds due 2024 rose two basis points, or 0.02 percentage point, to 5.11 percent at 10:16 a.m. in Bogota, the highest since Feb. 5, according to the central bank. The yield has jumped 20 basis points this week.

There is “speculation we may see a pause in the cycle of interest-rate cuts,” Jorge Cardozo, an analyst at Corredores Asociados brokerage in Bogota, said in a phone interview.

Colombia’s economy probably expanded 3 percent in the fourth quarter from a year earlier after growing 2.1 percent in the third quarter, according to the median estimate of 30 economists in a Bloomberg survey. The national statistics agency is slated to publish the report at 11 a.m. in Bogota.

Banco de la Republica will lower borrowing costs by 25 basis points to 3.5 percent on March 22, according to 29 of 32 analysts and economists surveyed by Bloomberg. The other three expect rates to remain unchanged. Policy makers have cut the overnight lending rate by 150 basis points since July to buoy growth in the Andean country.

The peso depreciated 0.4 percent to 1,825.80 per U.S. dollar in its sixth day of losses, the longest losing streak since October.

Finance Minister Mauricio Cardenas told flower growers in Bogota yesterday that Colombia must do everything possible to weaken the currency.

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.