Colombia’s peso bonds fell, pushing yields on benchmark securities to rise the most in two weeks, as investors sold the securities before year-end holidays.

The yield on Colombia’s 10 percent bonds due in July 2024 rose four basis points, or 0.04 percentage point, to 7.60 percent, according to the stock exchange. That’s the biggest increase since Dec. 6. The bond’s price fell 0.368 centavo to 118.937 centavos per peso.

“Investors are closing their positions as we approach the end of the year and especially given all the external noise,” said Beatriz Alarcon, a fixed-income analyst at Acciones y Valores SA brokerage in Bogota. “Volumes are low, as is common at this time of year.”

Colombia’s central bank on Dec. 16 held the overnight lending rate at 4.75 percent, as forecast by 26 of 32 economists surveyed by Bloomberg. Six analysts expected the bank to raise the rate to 5 percent.

In November, policy makers raised the rate a quarter percentage point, citing the need to bolster the central bank’s credibility after “strong” growth drove up inflation expectations, according to minutes of the meeting.

‘More Increases’

Banco de la Republica’s statement following last week’s rate decision “signals more increases to come,” said Camilo Perez, head analyst at Banco de Bogota SA, the country’s second- biggest bank. He predicts policy makers will raise the key rate in February to 5 percent, leaving it at that level through the remainder of the year.

Colombia’s economy probably grew more than 6 percent in the third quarter, Banco de la Republica said in the statement following the rate decision. Latin America’s fifth-largest economy may grow as much as 6 percent in 2011, the central bank has said, which would make it the fastest pace since 2007.

Bank lending is expanding “at a fast pace and seems to be accelerating,” and housing costs are at a record, policy makers said in the statement. The balance of risks is “very sensitive” to new data about the local and global economy, according to the statement.

The peso rose 0.3 percent to 1,935.10 per U.S. dollar, from 1,940.97 on Dec. 16.