Colombia's Public Credit Directorate awarded one-year TES bonds at a cut-off rate of 13.494% in the March 24 auction, setting a new historical high. With 5.29% inflation, this yields a real rate near 8.2%. The outcome signals heightened fiscal risk perception among investors.
The Public Credit Directorate of the Finance Ministry, headed by Germán Ávila, concluded its twelfth short-term TES auction on March 24. The cut-off rate hit 13.494%, surpassing the previous record of 13.390% from March 3 and 13.050% on January 10, 2023. The bid/cover ratio stood at 1.5, meaning demand exceeded the offered amount by one and a half times, differing from stronger investor appetite in prior auctions. The Banco de la República's intervention rate is currently 10.25%, creating a 3.244 percentage point spread with one-year TES rates. This widening gap indicates investors demand a higher premium to fund the government short-term. A Banco de la República monetary policy meeting is scheduled for next Tuesday. The month also saw a slight yield curve inversion, with one-year TES rates above 10-year bond rates. These factors suggest tighter financial conditions in the short and medium curve segments amid slowdown expectations.
