MNI Colombia Central Bank Preview - April 2021

Full preview with analyst views can be accessed here:

MNI BanRep Preview April 2021.pdf

Another Unanimous Hold – The MPC are likely to keep the overnight lending rate unchanged at 1.75%. While it is still too early to digest the potential outcome of the proposed tax reforms, initial sentiment and domestic market developments may bolster hawkish arguments among the governing board.

Board Communication – Governor Villar commented that he could not confirm the central bank have reached the lower limit where it would be impossible to cut rates further. While some analysts highlighted this as potentially dovish, we would highlight additional comments that may comply with slightly more hawkish expectations for the pricing of rates:

"In current conditions where international medium and long-term interest rates have shown an important upward adjustment, the risk that portfolio investors have a reduced risk appetite for emerging markets is not insignificant, which obviously reduces the available space for more expansive monetary policies on the part of our central banks".