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Colombia bond yields post biggest drop since 2011

Monday, October 8, 2012

Colombia’s peso bond yields posted their biggest weekly drop since May 2011 as speculation inflation slowed in September and the central bank will lower interest rates boosted demand for the fixed-rate securities.

The yield on the government’s 10 percent peso-denominated bonds due in July 2024 fell 11 basis points, or 0.11 percentage point, to 6.15 percent, according to the central bank, the lowest level since the debt was first sold in 2009. The yield dropped for a third week, declining 20 basis points.

“Inflation will remain under control, creating a favorable environment for the fixed-income market,” said Juan Pablo Espinosa, the head of economic research at Bancolombia SA (BCOLO), the country’s biggest bank. “There is room for gains across the curve in the next month.”

Source: Bloomberg