By Drew Benson and Andrea Jaramillo July 23 (Bloomberg) -- Colombia’s peso rose to a 10-month high as a global stock rally sparked demand for higher-yielding, emerging-market assets. The currency rose 1 percent to 1,954.35 per U.S. dollar at 5:26 p.m. New York time from 1,972.85 yesterday. It earlier touched 1,947.30, the strongest level since Sept. 1. The peso is up 10.6 percent during the past month, the best performance of any currency during that period. The peso rose for a third day after the Standard & Poor’s 500 Index surged 2.3 percent and Europe’s Dow Jones Stoxx 600 Index added 1.9 percent. The MSCI Emerging Markets Index of 22 countries climbed 2 percent. Better-than-expected corporate earnings and an increase in U.S. home resales fueled global stock gains. “Most of the world’s stock markets are up today,” fueling demand for higher-yielding assets, said Daniel Arguelles, a senior foreign-exchange trader at Bogota-based Corredores Associados. Colombia’s central bank will leave its overnight lending rate unchanged at 4.5 percent when policy makers meet tomorrow, according to the median estimate in a Bloomberg News survey of 30 economists. The yield on Colombia’s 11 percent bonds due in July 2020 fell 14 basis points, or 0.14 percentage point, to 8.79 percent. The bond’s price climbed 1.026 centavo to 115.160 centavos per peso, according to Colombia’s stock exchange. Colombia’s Credit Rating Colombia’s foreign credit rating may be raised to investment grade by Standard & Poor’s Rating Services when the South American nation recovers from the global crisis, the rating agency said in a report today. “Successfully withstanding the severe stress imposed on the Colombian economy during the global downturn could set the stage for an upgrade when the global economy starts to recover and if Colombia’s fiscal and debt profiles become stronger,” S&P said. The agency affirmed Colombia’s foreign debt rating at BB+, or one level below investment grade. In Argentina, the yield on the country’s inflation-linked peso bond due in 2033 tumbled 33 basis points to 12.42 percent, according to Citigroup Inc.’s local unit. Argentina’s peso slid 0.1 percent to 3.8090 per dollar, from 3.8067 yesterday. Chile’s peso rose 0.1 percent to 533.92 per dollar, from 534.65 yesterday. The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose three basis points to 2.93 percent, according to Bloomberg composite prices. Peru’s sol rose 0.5 percent to 2.9940 per dollar from 3.0078 yesterday. The yield on the nation’s 8.6 percent sol- denominated bond due August 2017 fell two basis points to 5.38 percent, according to Citigroup’s local unit. To contact the reporters on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net; Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

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