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BBVA Expect 50bp BanRep Cut, See COP Remaining Strong For Now

COLOMBIA
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  • BBVA expect BanRep to cut by 50bp to 11.75% at its policy meeting today (decision due at 1900BST/1400ET). A cut of 50bp would be in line with the move in March, bringing total easing for the cycle to 150bp. BBVA expect a few board members to vote for larger cuts. Forward guidance is still likely to suggest further easing, with the size and timing dependent on incoming CPI data.
  • BBVA expect BanRep to accelerate to 75bp by June as core CPI inflation should continue to converge below the 4.00% upper tolerance band, together with improving – although still slow – growth and sluggish credit conditions. They still prefer Colombia local rates in the belly and front-end of the curve and see the COP remaining strong for now despite some carry erosion, given the pause and potential turn in the strength of the USD.
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  • BBVA expect BanRep to cut by 50bp to 11.75% at its policy meeting today (decision due at 1900BST/1400ET). A cut of 50bp would be in line with the move in March, bringing total easing for the cycle to 150bp. BBVA expect a few board members to vote for larger cuts. Forward guidance is still likely to suggest further easing, with the size and timing dependent on incoming CPI data.
  • BBVA expect BanRep to accelerate to 75bp by June as core CPI inflation should continue to converge below the 4.00% upper tolerance band, together with improving – although still slow – growth and sluggish credit conditions. They still prefer Colombia local rates in the belly and front-end of the curve and see the COP remaining strong for now despite some carry erosion, given the pause and potential turn in the strength of the USD.