Colombia’s central bank board will meet on Thursday to discuss monetary policy. Most observers expect one last interest rate rise due to predictions that the weakening economy will lower inflation.
Last week, Reuters polled 32 analysts and found that 23 anticipate the board to raise the rate by 25 basis points to 13%, and nine predict a 50 basis-point rise to 13.25%.
According to most estimates, the rate will reach levels not seen since November 1999.
The monetary policy authority boosted rates by 75 basis points to 12.75% at the end of January, although such a move would be lower.
“The uptrend is ending. The economy is weakening, and while inflation continues to surpass the bank’s (benchmark interest) rate, anticipated inflation for the coming year supports a restrictive monetary attitude “said Fiduoccidente investment strategy director Daniel Escobar.
Analysts don’t anticipate all seven bank board members to approve.
The Fed and ECB have raised interest rates with market instability and tightening financial conditions.
With a predicted rate hike on Thursday, analysts expect several months of stability before the central bank begins a downward cycle, lowering the cost of money to 11.5% by the end of this year and 7% by 2024.
Comment Template