The Head of State remarked that he would cease payments if lawmakers did not approve an increase in the nation’s budget limit.

Colombian bonds plunged by more than 30% during Friday afternoon, following President Gustavo Petro’s warning to lawmakers that failure to approve an increase in the nation’s debt ceiling would result in payment cessation.

According to a post on X (formerly Twitter), the President argued that if congressional committees do not approve raising the limit, “there will simply be a default or I will have to declare an economic emergency… I will not hesitate to do so.”

It’s an unnecessary comment. Colombia may not default. While it’s necessary to raise the limit, this might not be the way to ask Congress to do it.

According to Bloomberg data, Colombian bonds with a maturity of two years fell by 30.5%, while those with three and seven years lost 12.4% each. Ten-year bonds dropped nearly 19%, while those with maturities of 15 and 30 years were down by 12.7% and 7% respectively. At the same time, the Colombian peso depreciated, and the dollar closed with an increase of almost 8% at 3,837.58 pesos.

Finance Minister Ricardo Bonilla emphasized that the Government is committed to servicing public debt, though he noted that the National Government is urging Congress to swiftly approve the project.