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BanRep Co-Director Steiner On Rate Path, Feb. Trade Balance

COLOMBIA
  • Colombia would need to see a trend of slowing inflation as well as a consolidated drop in inflation expectations before cutting interest rates, central bank co-director Roberto Steiner said in a conference organized by BTG Pactual on Thursday.
    • Steiner said it’s reasonable to think inflation reached its peak but detailed that one month of slow inflation data isn’t enough to consider rate cuts, but several months are needed. High minimum wage rises in real terms make it more difficult for central bankers to control inflation and hurt the labor market.
    • Steiner added that the rise in Colombia’s credit default swaps is very worrying. The government’s messages about moving away from oil and gas have affected credit risk. He acknowledged that finance Minister Jose Antonio Ocampo has done good work on dissipating fears and calming markets
    • Ceasing oil drilling would be suicide for fiscal accounts and the currency. Any fiscal adjustment beyond what the government has announced is welcome.
  • Data today is scheduled for 1600BST/1100ET:
    • Feb. Colombia Trade Balance, est. -$525m, prior -$1.48b
    • Feb. Imports CIF Total, est. $5.14b, prior $5.53b

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