FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Goldman Sachs on Thursday’s BanRep Meeting/Decision

COLOMBIA
  • Goldman Sachs expect the MPC to accelerate the pace of normalization and hike the policy rate by 150bp to 7.50%. The decision may result from a split vote, with some directors supporting to continue with the 100bp pace of hikes.
    • In their assessment, BanRep needs to accelerate the pace of tightening or it risks falling behind the curve.
  • Overall, adjusting by one-year-ahead inflation expectations, the ex-ante real policy rate is back to the low level ahead of the April 29 meeting: 0.66% (0.56% in April), while the central bank's estimate for the neutral rate in 2022 is 1.80% (1.90% for 2023). Therefore, despite the high growth and high inflation environment, monetary policy still remains somewhat expansionary.
  • In Goldman’s view, a restrictive monetary stance (above-neutral policy rate) is warranted given the strong growth dynamics, above-target inflation, drifting inflation expectations, and a large external deficit whose funding could become more challenging as global financial conditions tighten and central bank’s in core economies turn more hawkish.
  • In addition, in their assessment, high risk-premia and a weaker exchange rate given a challenging fiscal picture and an uncertain policy environment following the presidential election results, also justify a careful calibration of the central bank's monetary stance.
  • All in all, GS expect the MPC to raise the policy rate further up in 2022 to a terminal rate of at least 8.50%. They see risks to their call as skewed to the upside.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

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.