Nov. 27 (Bloomberg) -- Colombia’s peso bond yields dropped to a two-week low after policy makers unexpectedly cut borrowing costs to buoy economic growth.
The yield on the 9.25 percent peso-denominated bonds due in May 2014 slid eight basis points, or 0.08 percentage point, to 4.96 percent, the lowest since Nov. 13, according to the central bank. The price rose 0.099 centavo to 105.842 centavos per peso.
Banco de la Republica lowered the target lending rate by a quarter-percentage point to 4.5 percent on Nov. 23, surprising all except two of 33 analysts surveyed by Bloomberg. Policy makers voted 4-3 to cut borrowing costs to the lowest in a year.
“The market usually takes about three days to incorporate surprise rate decisions,” said Daniel Lozano, the head analyst at Serfinco SA brokerage in Bogota. “Yields in the short and medium part of the curve should continue to fall.”
The peso was little changed at 1,824.72 per U.S. dollar. It has appreciated 0.4 percent in November and risen 6.2 percent this year.
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