Colombia’s peso advanced the most in 10 weeks following gains in oil, the South American nation’s biggest export, and as the country’s growing economy and controlled inflation boosted appetite for bonds.
The peso strengthened 0.9 percent to 1,795.97 per dollar at 2:12 p.m. New York time, from 1,811.90 yesterday.
The advance is the biggest since May 31.
“While we’ve had a difficult few weeks in global markets, Colombia’s fundamentals in terms of growth and stable inflation are boosting the appeal of its bonds and leading traders to bet on a relatively stable peso,” said Felipe Campos, head analyst at Alianza Valores SA brokerage in Bogota.
“Commodities are sought as refuge in moments of crisis and that should also help commodity currencies such as the peso.”
Oil rose from a 10-month low in New York amid speculation that the U.S. Federal Reserve will implement a third round of asset purchases to bolster the economy and on signs that U.S. crude supplies are shrinking.
Crude accounts for about 40 percent of Colombia’s exports. Colombia also exports coal, gold and coffee.
Colombia’s economy will grow about 6 percent this year, Finance Minister Juan Carlos Echeverry has said.
Annual inflation was 3.42 percent in July, within the central bank’s 2 percent to 4 percent 2011 target.
The yield on Colombia’s 10 percent bonds due in July 2024 fell nine basis points, or 0.09 percentage point, to 7.48 percent, according to data compiled by the nation’s stock exchange.
The yield has fallen 16 basis points so far this month.
The bond’s price rose 0.826 centavo today to 120.439 centavos per peso.
Colombia’s borrowing costs fell today at an auction of fixed-rate peso bonds, known as TES.
Peso bonds due July 2024 were sold to yield 7.49 percent, lower than the 7.68 percent at the last auction on July 27, the Finance Ministry said in a statement.
Colombia also auctioned bonds due October 2.018 to yield 7 percent, and October 2.015 securities to yield 6.45 percent.
The peso strengthened 0.9 percent to 1,795.97 per dollar at 2:12 p.m. New York time, from 1,811.90 yesterday.
The advance is the biggest since May 31.
“While we’ve had a difficult few weeks in global markets, Colombia’s fundamentals in terms of growth and stable inflation are boosting the appeal of its bonds and leading traders to bet on a relatively stable peso,” said Felipe Campos, head analyst at Alianza Valores SA brokerage in Bogota.
“Commodities are sought as refuge in moments of crisis and that should also help commodity currencies such as the peso.”
Oil rose from a 10-month low in New York amid speculation that the U.S. Federal Reserve will implement a third round of asset purchases to bolster the economy and on signs that U.S. crude supplies are shrinking.
Crude accounts for about 40 percent of Colombia’s exports. Colombia also exports coal, gold and coffee.
Colombia’s economy will grow about 6 percent this year, Finance Minister Juan Carlos Echeverry has said.
Annual inflation was 3.42 percent in July, within the central bank’s 2 percent to 4 percent 2011 target.
The yield on Colombia’s 10 percent bonds due in July 2024 fell nine basis points, or 0.09 percentage point, to 7.48 percent, according to data compiled by the nation’s stock exchange.
The yield has fallen 16 basis points so far this month.
The bond’s price rose 0.826 centavo today to 120.439 centavos per peso.
Colombia’s borrowing costs fell today at an auction of fixed-rate peso bonds, known as TES.
Peso bonds due July 2024 were sold to yield 7.49 percent, lower than the 7.68 percent at the last auction on July 27, the Finance Ministry said in a statement.
Colombia also auctioned bonds due October 2.018 to yield 7 percent, and October 2.015 securities to yield 6.45 percent.
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