Colombia Peso Bond Yields Fall Near Record Low on Growth Outlook

Colombia’s peso bonds rose, pushing yields near a record low, on speculation slowing growth will damp inflation.

The yield on Colombia’s 10 percent peso-denominated debt due in July 2024 declined one basis point, or 0.01 percentage point, to 6.55 percent, according to the central bank. It fell to 6.5 percent on Sept. 13, the lowest closing level since the securities were first issued in 2009.

Colombia will report this week that economic expansion slowed to 4.2 percent in the second quarter from 4.7 percent in the first three months of 2012, according to the median estimate of 25 economists surveyed by Bloomberg.

“Should growth come in slower than expected, we’ll see less inflation,” said Santiago Melo, an analyst at Alianza Valores SA brokerage in Bogota.

Annual inflation was 3.11 percent last month, within the central bank’s 2 percent to 4 percent target.

Colombia’s peso gained 0.1 percent to 1,796.25 per U.S. dollar after erasing an earlier drop of as much as 0.4 percent. The currency has jumped 7.9 percent this year.

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