Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Colombia Swap Yields Fall on Outlook for Rate Cut: Bogota Mover

June 21 (Bloomberg) -- Yields on Colombia’s interest-rate swaps fell to a four-month low as signs the economy is slowing led traders to bet on a cut in borrowing costs this year.

The yield on three-month interest-rate swaps fell one basis point, or 0.01 percentage point, to 5.05 percent, according to data compiled by Bloomberg. It was the lowest level on a closing basis since Feb. 13.

The drop indicates traders expect policy makers to cut the overnight lending rate within the next three months from the current 5.25 percent. That differs from a central bank survey published June 13 showing most analysts expect them to raise the target rate by a quarter-percentage point in December.

“The economy is decelerating,” Pedro Ospina, a fixed-income analyst at Interbolsa SA in Bogota, said in a phone interview. “That puts a nail in the coffin on those bets for more hikes.”

Gross domestic product grew 4.7 percent in the first quarter from a year earlier, the national statistics agency said today. The increase was in line with the median forecast of 27 analysts surveyed by Bloomberg and down from 6.1 percent in the last three months of 2011.

April retail sales declined 2.8 percent in the first year-on-year drop since September 2009, the government said yesterday. The result was worse than all of the forecasts compiled by Bloomberg. Industrial output fell 1.6 percent, compared with a median estimate for a 1 percent increase. Colombia has raised interest rates nine times since the start of 2011 to cool growth propelled by consumer credit growth and record levels of foreign investment in oil and mining.

Peso Bonds

The yield on Colombia’s 10 percent peso-denominated debt due in July 2024 fell three basis points, or 0.03 percentage point, to 7.01 percent, according to the central bank. That’s the lowest level on a closing basis since the securities were issued in 2009.

“Fundamentals are positive to be invested in fixed-rate securities in the medium and long end of the curve,” Ospina said. “Inflation is under control, and inflation expectations will remain low.”

Colombia’s peso depreciated 0.4 percent to 1,777.43 per dollar. It has gained 9.1 percent this year, the best performance among all of the 170 currencies tracked by Bloomberg.

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.