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COLOMBIA: BanRep Expected to Cut 50BPs, CARF on Fiscal Adjustment

COLOMBIA
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  • BanRep is almost unanimously expected to continue its gradual pace of easing, cutting the policy rate by another 50bp to 9.25%. The decision is scheduled for 1800GMT/1300ET. Heightened fiscal concerns and COP weakness across H2 threaten to derail the disinflation process, dispelling the chance to increase the easing pace. The full MNI preview with analyst views is here: https://mni.marketnews.com/4foObNt
  • The government needs to implement a COP 52tn fiscal adjustment next year, equivalent to 2.9% of GDP, to comply with the 2025 fiscal rule, according to the country’s autonomous fiscal rule committee. The committee also said that current cash flow levels in pesos pose liquidity risks, raising concerns about the cash position for next year.
  • Meanwhile, the committee said that the government needs a further fiscal adjustment of COP 8.4tn this year, in addition to the COP 28.4tn already announced. The committee expects the government will execute its fiscal adjustment beginning next year when the finance ministry updates its 2025 financing plan.
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  • BanRep is almost unanimously expected to continue its gradual pace of easing, cutting the policy rate by another 50bp to 9.25%. The decision is scheduled for 1800GMT/1300ET. Heightened fiscal concerns and COP weakness across H2 threaten to derail the disinflation process, dispelling the chance to increase the easing pace. The full MNI preview with analyst views is here: https://mni.marketnews.com/4foObNt
  • The government needs to implement a COP 52tn fiscal adjustment next year, equivalent to 2.9% of GDP, to comply with the 2025 fiscal rule, according to the country’s autonomous fiscal rule committee. The committee also said that current cash flow levels in pesos pose liquidity risks, raising concerns about the cash position for next year.
  • Meanwhile, the committee said that the government needs a further fiscal adjustment of COP 8.4tn this year, in addition to the COP 28.4tn already announced. The committee expects the government will execute its fiscal adjustment beginning next year when the finance ministry updates its 2025 financing plan.