May 29 (Bloomberg) -- Colombia’s peso rose to an eight- month high amid gains in oil, the nation’s biggest export, and increased appetite for higher-yielding, emerging-market assets.

“The weak dollar and higher commodity prices are pushing gains in emerging-market currencies,” said Camila Estrada, head analyst at Banco de Credito de Colombia SA. “There’s a lot of optimism towards Latin America, and if commodity prices continue their rising trend, it will favor growth in the region.”

Colombia’s peso jumped 1.8 percent to 2,137.15 per dollar at 3:27 p.m. New York time, from 2,175.55 yesterday. It earlier touched 2,130.20, its highest level since Sept. 26. The currency climbed 3.2 percent this week, the biggest gain since the period ended May 8, and has strengthened 7.3 percent this month.

The dollar today declined beyond $1.41 against the euro for the first time this year as growing evidence the global recession is easing sent investors in search of assets with higher returns. Commodities headed for the biggest monthly rally in 34 years, with crude oil set for the biggest monthly gain in a decade.

The yield on Colombia’s 11 percent bonds due in July 2020 fell nine basis points, or 0.09 percentage point, to 8.90 percent. The price increased 0.680 centavo to 114.416 centavos per peso, according to Colombia’s stock exchange.

Policy makers today lowered the overnight lending rate by a full percentage point to 5 percent, in line with the median estimate of 29 economists in a Bloomberg survey.

Smaller Rate Cuts

The central bank said in a statement an “eventual rate cut in the future will be smaller than the ones observed recently.” Policy makers expect the Colombian economy to recover in the second half of the year, according to the statement.

Gains in peso bonds “will probably start to moderate as the market prices in either no more rate cuts or very few,” said Arnoldo Casas, head analyst at Bogota brokerage Cia. de Profesionales de Bolsa. “Since the central bank expects the economy to begin to recover in the second half and with commodity prices rising, we probably won’t see any more cuts.”