MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

EZ/UK T-Bill Calendar: 3/6-Month ATB Auction on Tuesday

EZ/UK Bond Supply Calendar: EU, FI Synds; IT, DE Auctions Tues

MNI: CANADA MAR INDUSTRIAL PRICES +0.8% MOM; EX-ENERGY +0.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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Goldman Sachs See BanRep Hiking To 7.50% This Year

COLOMBIA
  • Goldman Sachs expect the MPC to continue with the pace of normalization and hike the policy rate by 100bp to 6.00%. The decision may again result from a split vote, with some directors supporting a bolder rate increase.
  • Overall, adjusting by one-year-ahead inflation expectations, the ex-ante real policy rate is still tracking at low levels: 0.62%, while the central bank's estimate for the neutral rate in 2022 is 1.80% (1.90% for 2023). Therefore, monetary policy still remains somewhat expansionary.
  • In Goldman Sachs’ view, a restrictive monetary stance (above-neutral policy rate) is warranted given the resilient growth dynamics, above-target inflation, drifting inflation expectations, and a large external deficit whose funding could become more challenging as global financial conditions tighten.
  • In addition, in their assessment, high risk-premia, given a challenging fiscal picture and an uncertain and polarized presidential election, also justify a careful calibration of the central bank's monetary stance. All in all, GS expect the MPC to drive the policy rate further up in 2022 to 7.50%.
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