Free Trial

Goldman Sachs Focused On Inflation Risks In BanRep’s MPR, Due Friday

COLOMBIA
  • BanRep will release its Q2 monetary policy report tomorrow, which will include updates to the central bank’s inflation, current account and GDP growth forecasts. Goldman Sachs expect minor revisions to some 2024 forecasts.
  • GS will be focused on the discussion around the risks to the forecast that inflation will return to the 2-4% target band by mid-2025. They note that several directors have emphasised the importance of returning to target no later than this date. GS will also be watching for staff estimates that the output gap has finally closed, as well as looking for an assessment on the implicit path for the monetary policy rate over the policy horizon.
  • GS will also be looking out for any possible revisions to the central bank’s estimate for the real neutral rate, which is currently at 2.4%. They note that the domestic premium remains above historical averages due partly to lingering policy uncertainty and risk of fiscal slippage. They view this variable as an important signal to calibrate the end-cycle terminal rate.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.