Colombia 10-year bond yields reach 13.13%

Yields on Colombia's 10-year sovereign bonds reached 13.13% on October 6, up 115 basis points from 11.98% recorded on August 6, according to Bloomberg data. The increase left Colombian notes as the most depreciated in the region, overtaking Brazil where yields stood at 12.77%.

In the emerging market ranking compiled by Bloomberg, Lebanon recorded the highest 10-year yield at 39.89%, followed by Turkey at 32.69%, Egypt at 21.01%, Nigeria at 16.29%, and Ghana at 14.67%. Colombia ranked sixth with a rate above 13%, ahead of Brazil, Pakistan at 12.54%, Mexico at 9.43%, and South Africa at 9.03%.

The upward move coincided with market anticipation over fiscal policy two months into the administration of President De la Espriella, with spending cuts unapproved and details on the Fiscal Rescue Law project still pending submission to Congress. Camilo Pérez, economic research analyst at Banco de Bogotá, noted that the market is waiting to see tangible results from the fiscal announcements.

Domestic fiscal projections also diverged. The Autonomous Committee of the Fiscal Rule (Carf) warned Congress that the fiscal deficit would reach 7.8% of GDP rather than the Ministry of Finance's target of 7.2% of GDP. Carf estimated that only COP 9.7 trillion (0.4% of GDP) of the ministry's planned COP 21.7 trillion spending adjustment is plausible, reflecting a gap of COP 12.0 trillion. For 2027, the ministry projects a deficit of 9.4% of GDP, while Carf expects 9.5% of GDP.