Colombia Peso Gains on Bet Intervention Falls Short; Yields Fall

Colombia’s peso rose for the first time in three days on speculation policy makers’ decision to boost dollar purchases won’t be enough to stem the peso’s appreciation.

The central bank will buy at least $30 million daily and buy at least $3 billion between February and May, officials announced late yesterday. The peso rallied 9.7 percent in 2012, the most among major Latin American currencies, making the nation’s coffee, flower and banana exporters less competitive.

“The measures won’t be enough to get the weaker exchange rate that the government is seeking,” said Jorge Cardozo, an analyst at Bogota-based brokerage Corredores Asociados.

The peso strengthened 0.4 percent today to 1,773.68 per dollar at the close of trading in Bogota, paring its drop in January to 0.4 percent.

Yields on the government’s 10 percent peso-denominated debt due in 2024 fell one basis point, or 0.01 percentage point, to

5.26 percent, according to the central bank. The price rose 0.13 centavo to 140.037 centavos per peso. Yields closed at 5.23 percent on Jan. 25, the lowest level since the securities were first issued in 2009.

Yields have tumbled 40 basis points in January in what would be their eighth monthly drop as traders anticipated the central bank’s fifth rate cut in seven meetings.

Banco de la Republica reduced its benchmark rate by a quarter-percentage point to 4 percent yesterday, as forecast by 31 of 33 analysts surveyed by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.