By Lester Pimentel

Sept. 4 (Bloomberg) -- Colombia's limited ``trade openness'' will hurt the country's ability to secure credit rating increases, according to Fitch Ratings.

Colombia benefits from two trade agreements while many countries in Latin America have as many as 14, Shelly Shetty, a senior director at Fitch Ratings in New York, wrote in a report today. The company rates Colombia's foreign-currency debt BB+. Trade in Colombia accounts for 33 percent of the country's gross domestic product, compared with the median of 60 percent for similarly rated countries, according to Fitch.

``Colombia's trade openness is limited in scope and not well-institutionalized relative to similarly rated sovereigns, regional peers and other emerging markets,'' Shetty said.

Colombia's economy may slow as 40 percent of the country's exports are destined for the U.S., where growth is sputtering, Fitch said. Colombia's exports also are dependent on the country's ties with Venezuela and Ecuador, ``countries with low credit ratings, heterodox policies and economic volatility,'' Shetty wrote.

The yield on Colombia's benchmark 11 percent peso bonds due in July 2020 fell 3 basis points, or 0.03 percentage point, to 11.53 percent at 1:16 p.m. in New York. The bonds' price rose 0.171 centavo to 96.599 centavos per peso, according to Colombia's stock exchange.

To contact the reporter on this story: Lester Pimentel in New York at lpimentel1@...

Last Updated: September 4, 2008 13:27 EDT

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