Columbian Bond Yields Rise to the Highest Figure in Last 7 Months, Currency Experiences Decline

The bond yields of Columbia rose to the highest level since November on today. The speculations are rising that the Federal Reserve will be tapering the stimulus and apart from that, the inflation in this Latin American country has been faster than what was forecasted. Both of these factors combined are squelching demand for the Columbian securities. The yield on the benchmark Columbian Peso bonds which are due on 2024 increased by 11 basis points (If converted to percentage point, the same will be of 0.11 percentage point), thereby taking the same to 6.13%. This is the highest value for the bond yields since 22nd November. The price however has experienced a decline of 1.13 Centavos and the same is currently at 130.560 Centavos for each Columbian Peso. In the last month, the yields, incidentally, have jumped up by 1.01 percentage point.

The currencies and bonds throughout the world have experienced retreat after the speculations rose that the spike in the biggest economy in the world will be prompting the Federal Reserve to scale back the asset purchase program of the same. Incidentally, the 10-year US Treasury yields have went ahead by 32 basis points in the last month and the same is currently at 2.10%. On the other hand, the consumer prices of Columbia went ahead by 2% in the last 12 months through May, as stated by the Columbian Government. Incidentally, the forecast was of an increase of 1.96%.

Camilo Perez, who is the head analyst at Banco de Bogota SA, thinks that the Federal Reserve stimulus and all the speculations over the same have been working as a big driver when it comes to the global sell off. Perez added that the inflation in Columbia is pretty high as well, thereby acting as an additional argument for the investors to sell the bonds. The buyers are less in numbers, when it comes to the Columbian market, as everyone seems to be in mood of selling. Incidentally, Banco de Bogota SA is the 2nd largest bank of Columbia.

When it comes to the major currency of Columbia, Columbian Peso went down by 0.5% and the same is currently at 1,908.59 per USD. This marks the weakest value of the currency since January, 2012. Incidentally, Columbian Peso has declined by 7.4% in 2013.