Latin American local bonds and currencies

Colombia, Mexico and Peru: Latin America Bond, Currency Preview

By Lydia Thew

Monday, October 29, 2007

(Bloomberg) -- The following events and economic reports may influence trading in Latin American local bonds and currencies today. Bond yields and exchange rates are from the Oct. 26 session.

Colombia: The central bank left its overnight lending rate unchanged at 9.25 percent, matching the median forecast in a survey by Bloomberg News. Policy makers attributed their decision in part to slowing inflation in September, led by food prices.

The yield on Colombia's benchmark 11 percent bond due July 2020 fell 6 basis points to 10.22 percent, according to the central bank. A basis point is 0.01 percentage point.

The peso rose 0.8 percent to 2007.5 per dollar.

Mexico: The central bank unexpectedly raised its benchmark rate a quarter-percentage point to 7.5 percent and said inflation will take longer to retreat than policy makers previously estimated. Twenty-two of 29 economists surveyed by Bloomberg had expected the central bank to leave rates unchanged.

The yield on the 7.25 peso-denominated bonds due in December 2016 rose 1 basis point to 7.86 percent, according to Banco Santander SA.

Mexico's peso rose 0.7 percent to 10.7345 per dollar.

Peru: The economy will grow 7.5 percent this year on surging construction and agricultural exports, Dionisio Romero Seminario, chairman of Peruvian financial holding Credicorp and Peru's richest man, told reporters in Lima Oct. 26.

The yield on Peru's 8.6 percent bonds maturing August 2017 fell 2 basis points to 6.31 percent, according to Citibank Peru.

The sol gained 0.1 percent to 3.0145 soles per dollar, close to a nine-year high.

To contact the reporter on this story: Lydia Thew in New York at lthew@bloomberg.net .