Colombian bond yields slid to their
lowest levels since June 2007 on rising speculation that the
central bank will cut interest rates later this month in a bid to
bolster the slowing economy.
The yield on the nation’s benchmark 11 percent bonds due in
July 2020 fell 10 basis points, or 0.1 percentage point, to 9.68
percent at 11:53 a.m. New York time, according to Colombia’s
stock exchange. That marked the lowest point since June 19, 2007.
“The economy minister said today that the government will
have to stimulate the economy, and that increases expectations
that the central bank is going to cut rates this month,” said
Adriana Botero, an analyst at Acciones y Valores, a Bogota-based
Botero forecasts the central bank will drop its overnight
lending rate by 50 basis points when policy makers next meet on
Feb. 27. Last month, the central bank lowered its rate for a
second month, dropping it by 50 basis points, in line with
forecasts, to 9 percent.
Colombia’s peso rose for the first time in eight days,
erasing earlier loses to climb 0.1 percent to 2,472.35 per dollar
from 2,473.95 yesterday, according to the Colombian foreign-
exchange electronic transactions system, known as SET-FX. Earlier
today the currency touched 2,499, its weakest since July 19,