Bloomberg News

Colombia Yields Fall to Four-Week Low Before Inflation Report

June 05, 2012

Colombia’s peso bonds rose, pushing yields to the lowest level in four weeks, before a report forecast to show inflation slowed in May.

The yield on 10 percent peso-denominated debt due in July 2024 fell two basis points, or 0.02 percentage point, to 7.08 percent, according to the central bank. That’s the lowest on a closing basis since May 8. The price increased 0.21 centavo to 123.256 centavos per peso.

Annual inflation slowed to 3.32 percent in May from 3.43 percent the previous month, according to the median estimate of 23 economists surveyed by Bloomberg. The national statistics agency is slated to publish its monthly report this evening in Bogota. Central bank chief Jose Dario Uribe said last month inflation will probably end the year at about 3 percent, the mid-point of the bank’s 2 percent to 4 percent target.

“People have been lowering their inflation bets,” said Pedro Ospina, a fixed-income analyst in Bogota at Interbolsa SA, the country’s biggest brokerage. “Gas prices have been cut and as the economy expands at a slower pace” that curbs inflation, he said.

Colombia lowered the price of gasoline in June for a second straight month as international oil prices fell in May. Policy makers expect Latin America’s fifth-largest economy to grow 5 percent this year after expanding 5.9 percent in 2011.

The peso climbed 1.4 percent to 1,792.35 per U.S. dollar. That’s its biggest jump on a closing basis since December 2010. The peso is up 8.2 percent this year, the best performance among all 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


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