Mexican Bond Yields Hold Near Eight-Month Low on Rates

Mexican peso bond yields held near an eight-month low as investors seek to profit from the Latin American country’s relatively higher interest rates.

The yield on Mexican local currency bonds due in 2024 was little changed at 6.17 percent at 4 p.m. Mexico City time. The yield fell to 6.165 percent on May 4, the lowest close since Aug. 22, according to data compiled by Bloomberg.

Mexico’s central bank kept its benchmark rate unchanged at 4.5 percent on April 27 after inflation slowed and the outlook for economic growth improved. To aid the economic recovery in the U.S., the Federal Reserve has kept its target rate within a record-low range of zero to 0.25 percent since December 2008.

“We’ve got this amount of global liquidity and emerging-market bonds look relatively attractive and Mexico fits into that camp,” Vivienne Taberer, who helps manage about $10.3 billion in emerging-market assets including Mexican local-currency bonds at Investec Asset Management, said by phone from Cape Town. “Mexico like South Africa and one or two other limited markets don’t have anything in place to stop foreign ownership.”

Global investors held 43.7 percent of outstanding Mexican local-currency, fixed-rate bonds known as Mbonos on April 25, compared with 33.2 percent a year earlier, according to the most recent data available from the central bank.

The peso was little changed at 13.1632 per U.S. dollar, from 13.1680 on May 4. It earlier touched 13.2990, the weakest intraday level since Jan. 19.

(Corrects date for foreign bond holdings in fifth paragraph.)
Before it's here, it's on the Bloomberg Terminal. LEARN MORE